Ajit Karn
According to two sources with direct knowledge of the matter, Apple Inc’s Taiwanese supplier Pegatron Corp is in discussions to establish a second factory in India, as the U.S. tech giant’s partners continue to diversify production away from China.
Pegatron intends to add a second facility near the city of Chennai in the Indian state of Tamil Nadu, just six months after opening its first facility with an investment of $150 million, according to sources who requested anonymity because the conversations are private.
According to the first source, the new factory will “assemble the latest iPhones.”
Pegatron declined to comment but stated, “All asset acquisitions will be disclosed in accordance with regulations.”
Apple did not respond to a request for comment.
Apple views India as its next development frontier. According to the India Cellular and Electronics Association, approximately $9 billion worth of smartphones were exported from India between April 2022 and February of this year, with iPhones accounting for more than half of that total.
Annually, Pegatron accounts for 10% of Apple’s iPhone production in India, according to research firm Counterpoint.
Apple and its main suppliers have shifted production away from China to avoid a potential business impact from escalating Sino-American trade tensions. Pegatron has sought to expand its presence in Southeast Asia and North America in recent years.
Ongoing negotiations involve the leasing of a second Pegatron facility, which will be located in Mahindra World City near Chennai, not far from where the firm opened its first plant in September 2022.
It is not immediately apparent what Pegatron intends to invest in the expansion. According to the first source, the new factory will be smaller than the old one.
Apple Inc. has placed a significant bet on the South Asian nation since it began iPhone assembly in India via Wistron and subsequently Foxconn in 2017, in accordance with the Indian government’s drive for local manufacturing.
India is the second largest smartphone market in the world, and Apple intends to manufacture iPad tablets and AirPods there.
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This week, the Indian state of Karnataka announced that it has approved a $968 million investment by Foxconn, resulting in the creation of 50,000 employment.
Foxconn intends to construct a $200 million factory in India to manufacture wireless earphones for Apple, according to a report by Reuters last week. Already, some iPhone models are assembled at its facility in Tamil Nadu.
