The Taiwanese manufacturer is in talks to lease a second factory near Chennai where it already operates a manufacturing unit
There is no clarity on the financial contours of the prospective investment, but the new facility will likely be smaller than the first one
Last week, Foxconn announced plans to invest $200 Mn to set up a facility in Telangana to manufacture AirPods
Contract manufacturer Pegatron is reportedly in talks to open a second manufacturing facility in India to assemble the ‘latest iPhones’.
Sources told Reuters that the Taiwanese manufacturer is in talks to lease a second factory near Chennai as it looks to move some of its production away from China. This comes barely six months after the manufacturer opened its first manufacturing facility in the same area which is said to have involved an investment of $150 Mn.
While there has been no clarity on the budgetary implications of the project, sources added that the new facility will likely be smaller than the first one.
While declining to comment, Pegatron said, “Any acquisition of assets will be disclosed based on regulations.”
The development comes as Apple and its contract manufacturers make a beeline for India and set up a base in the country. The move has largely been led by concerns over growing clashes between the US and China over geopolitical issues. Besides, incessant lockdowns by China late last year snapped supply chains as the movement of iPhones from production facilities to port cities proved difficult.
On the other hand, the move to India has largely been led by attractive production-linked incentives (PLIs) offered by the Centre to spur the local manufacturing ecosystem.
Not just Pegatron, Apple’s other contract manufacturers – Wistron and Foxconn – have invested heavily in India to scale up their production facilities. Compared to its peers, Pegatron accounts for 10% of Apple’s iPhone production in India annually, and it is this number that the Taiwanese manufacturer wants to increase further.
Further, Foxconn recently announced that it would invest $200 Mn to set up a facility in Telangana to manufacture AirPods. Before that, Apple vendor Jabil began manufacturing AirPods components in the country, while Finnish manufacturer Salcomp unveiled plans to double its workforce in the country to 25,000 by 2026.
Interestingly, the move comes a week after it was reported that the Cupertino-based tech major was undertaking a major rejig of its international management to revamp its focus on India. Earlier this month, it was announced that Apple was all set to open its first retail store in the country in Mumbai in April.
Between April and December 2022, Apple exported iPhones worth more than $2.5 Bn from India as it continues to be bullish on the country amid growing rivalries between Beijing and Washington DC.
