In order to increase local production, Apple Inc. partner Foxconn Technology Group is to invest roughly $700 million in a new factory in India, according to people with knowledge of the situation, emphasizing the rapid migration of manufacturing away from China as Washington-Beijing tensions rise.
The plant will manufacture iPhone parts on a 300-acre site near the airport in Bengaluru, the capital of the southern Indian state of Karnataka, according to the people who asked not to be identified because the information is private. The Taiwanese company, which is also known for its flagship unit, Hon Hai Precision Industry Co., also plans to build the plant. Some of the sources said that the facility may also assemble Apple Inc. smartphones and that Foxconn may use the location to make some parts for its embryonic electric vehicle business.
The investment, one of Foxconn’s largest single expenditures in India to date, highlights how China is in danger of losing its position as the top maker of consumer electronics worldwide. In order to find alternate sites, such as India and Vietnam, Apple and other US firms are relying on their Chinese-based suppliers. It’s a rethinking of the global supply chain that has been pushed by the pandemic and the conflict in Ukraine and might alter how electronics are produced globally.
According to the sources, the new manufacturing facility in India is anticipated to generate roughly 100,000 jobs. Now, there are about 200,000 workers at the company’s sizable iPhone assembly facility in the Chinese city of Zhengzhou, though that number rises during the busiest production period.
Due to COVID-related problems, Zhengzhou plant output plummeted before the year-end holidays, prompting Apple to review its China-dependent supply chain. The new move, made by Foxconn, shows that suppliers may be moving capacity out of China much more quickly than anticipated.
Until Foxconn finalizes the investment and project details, the plans could yet alter, according to the sources. Furthermore, it’s not clear if Foxconn is transferring manufacturing to the plant from other locations, like its Chinese plants, or if it is adding capacity.
Apple opted against commenting. A request for comment sent through email to Hon Hai, whose Chairman Young Liu visited with Indian Prime Minister Narendra Modi this week, was not immediately answered. Also failing to reply right away was the state government of Karnataka. The adjacent Telangana state has accepted Liu’s commitment to another manufacturing project while she is on tour in India.
Foxconn’s decision would be a triumph for Modi’s administration, which sees a chance to reduce India’s technological deficit with China as Western investors and corporations grow weary of Beijing’s crackdowns on the private sector.
India has provided monetary incentives to Apple suppliers like Foxconn, which started producing the most recent iPhones at a facility in Tamil Nadu last year. Along with vendors like Jabil Inc., smaller rivals Wistron Corp. and Pegatron Corp. have increased their presence in India.