The iPhone contract manufacturer plans to build a $700 million plant in India, replacing production in China
Apple partner Foxconn Technology Group plans to invest about $700 million in a new plant in India to boost local production, people familiar with the matter said, underscoring the acceleration of shifting production from China amid rising tensions between Washington and Beijing, writes Bloomberg.
The Taiwanese company, also known for its flagship unit Hon Hai Precision Industry Co., plans to build the plant to make iPhone parts on a 300-acre site close to the airport in Bengaluru, the capital of the southern Indian state of Karnataka, according to the people, who asked not to be named as the information is not public. The factory may also assemble Apple’s handsets, some of the people said, and Foxconn may also use the site to produce some parts for its nascent electric vehicle business.
The investment is one of Foxconn’s biggest single outlays to date in India and underscores how China’s at risk of losing its status as the world’s largest producer of consumer electronics. Apple and other US brands are leaning on their Chinese-based suppliers to explore alternative locations such as India and Vietnam. It’s a rethink of the global supply chain that’s accelerated during the pandemic and the war in Ukraine and could reshape the way global electronics are made.
The new manufacturing site in India is expected to create around 100,000 jobs. The sprawling iPhone assembly facility in the Chinese city of Zhengzhou currently employs about 200,000 workers, although that number rises during peak production season.
Production at its Zhengzhou plant fell sharply ahead of the New Year holiday due to Covid-related disruptions, prompting Apple to review its China-dependent supply chain. Foxconn’s decision is the latest move to suggest that suppliers may move capacity out of China much sooner than expected.
Foxconn’s decision would be a coup for the Modi government, which sees an opportunity to close India’s technological gap with China as Western investors and corporations are frustrated by Beijing’s crackdown on the private sector.
India has offered financial incentives to Apple suppliers such as Foxconn, which last year began producing the latest generation of iPhones at a plant in Tamil Nadu. Smaller competitors Wistron Corp. and Pegatron Corp. have also stepped up their activities in India, and suppliers such as Jabil Inc. have already started producing components for AirPods in the country.