Pegatron In Talks With Tata To Hand Over Control Of iPhone Factory

SUMMARY

Tata plans to hold at least a 65% stake in a joint venture with Pegatron, which will operate the latter’s iPhone manufacturing unit in Tamil Nadu

The talks with the Tata Group also involve the conglomerate taking over an iPhone factory being built by Pegatron at its Chennai campus

Tata acquired Wistron InfoComm Manufacturing’s manufacturing facility in Karnataka last year, marking its foray in the iPhone assembling space

Taiwanese electronics major Pegatron is reportedly in advanced talks with salt-to-software conglomerate Tata Group to hand over the control of its only iPhone manufacturing facility in India.

As per a Reuters report, Tata plans to hold at least a 65% stake in a joint venture (JV) between the two companies, which will operate the Pegatron plant in Tamil Nadu’s Hosur.

The deal has also received Apple’s backing, the report said.

Earlier this year, the news agency reported that the Tata Group was in advanced discussions with the Taiwanese electronics major to form a JV for setting up its second iPhone facility in Tamil Nadu.

In November last year, Tata also acquired Wistron InfoComm Manufacturing’s manufacturing facility in Karnataka, marking its foray into assembling Apple iPhones.

The Pegatron India factory has about 10,000 employees and makes 5 Mn iPhones annually. This is Pegatron’s last such facility after it forfeited control of an iPhone plant in China last year to rival Luxshare.

Meanwhile, a source also told the news agency that Pegatron has been building another iPhone factory at its Chennai campus for months. The JV talks with Tata also include taking over that facility.

The discussions between Tata and Pegatron are expected to close in six months. Following the deal, the employees of Pegatron India are expected to move to the JV entity.

Apple, for the last few years, has been looking at expanding and diversifying its supply chain beyond China, and India has emerged as a key beneficiary of this shift. Currently, the tech giant’s iPhone contract manufacturers in India include Pegatron, Foxconn, and Tata.

As per the news agency, the reason for Pegatron’s decision to scale back was not clear.

Meanwhile, it must be noted that there have been a few recent mishaps at Pegatron’s iPhone facility in the country. In September last year, a fire incident occurred at the factory, which was attributed to a short circuit.

Shortly after, both Pegatron and Foxconn had to temporarily stall production of iPhones at their facilities near Chennai due to a cyclone.

In 2023, Apple reportedly manufactured iPhones worth INR 1 Lakh Cr in India.