SUMMARY
The Indian conglomerate is looking to buy the facility for INR 4,000-5,000 Cr
If the transaction goes through, it will help Tata ramp up the manufacturing capabilities of group company Tata Electronics in precision engineering
According to a CMR report, in the second quarter of 2022, Apple shipped nearly 1.2 Mn India-manufactured smartphones
Tata Group has started talks with Wistron, one of the three Apple vendors in India, to buy its manufacturing facility in Karnataka.
The Indian conglomerate is looking to buy the facility for INR 4,000-5,000 Cr, ET reported.
If the transaction goes through, it will help Tata ramp up the manufacturing capabilities of group company Tata Electronics (TEPL) in precision engineering.
It is to be noted that TEPL is already a components vendor for Apple’s iPhones and plans to also deal with other large manufacturers from Korea and Japan as part of a ‘larger electronics ecosystem’.
If the facility buyout did not work out, Tata Group would independently also pursue the JV route.
“Tatas will run the show, but Wistron may keep a small share to leverage on the global vendor ecosystem of Apple,” a source told ET.
Currently, Apple produces the iPhone SE, iPhone 12, iPhone 13 and iPhone 14 (basic) models in India, while the Pro models sold in the country are imported. Besides Wistron, the other two leading vendors for Apple in India are Foxconn, Pegatron.
TEPL is a wholly owned subsidiary of Tata Sons. It was set up to lead the conglomerate’s ambitions to become a scaled mobile phone and component contract manufacturer.
The move comes at a time when Apple has begun manufacturing the latest iPhone 14 variants in India within weeks of its global launch. It further claimed to move 5% of the global manufacturing demand to India by the end of 2022, making INR 47,000 Cr worth of indigenous iPhones in FY23.
According to a CMR report, in the second quarter of 2022, Apple shipped nearly 1.2 Mn India-manufactured smartphones – growing 94% YoY. The growth was largely led by sales of iPhone 12 and iPhone13. Interesigely, close to a million of the total shipments were ‘Make in India’ devices.
As per analysts at brokerage firm J.P. Morgan, Apple Inc may make one out of four iPhones in India by 2025.
The Indian government launched a production-linked incentive (PLI) scheme for large-scale electronics companies to boost domestic manufacturing in the country. Moreover, many smartphone manufacturers are considering to scale down investment in China due to overburdened regulations and geopolitical tension.
