Tata Group to Become First Indian iPhone Maker with Acquisition of Apple Supplier's Factory
Tata Group, India's largest conglomerate, is on the verge of finalizing a deal to acquire an Apple Inc. supplier's factory, making it the first Indian company to enter the assembly of iPhones. According to sources familiar with the matter, the takeover of Wistron Corp.'s factory in southern Karnataka state is expected to be completed by August, after almost a year of negotiations.
The potential deal, valued at over $600 million, would also signify a significant milestone in India's manufacturing sector. To win state-backed financial incentives, Wistron had committed to exporting iPhones worth at least $1.8 billion from the factory by March 2024, as well as expanding the workforce. Tata Group will honor these commitments, as Wistron exits the iPhone business in India.
This move by Tata Group comes at a time when Apple is actively seeking to diversify its production beyond China and increase its technology manufacturing capabilities in India. Wistron, which exported nearly $500 million worth of iPhones from India in the last quarter, joins other Taiwanese suppliers such as Foxconn Technology Group and Pegatron Corp., who have also expanded their operations locally.
Under Prime Minister Narendra Modi's government programs, India has made strides in domestic manufacturing with lucrative financial incentives to bolster production and employment. Apple's initiative to reduce its reliance on China, coupled with the impact of the COVID-19 pandemic and escalating tensions between the US and China, has motivated the tech giant to explore new manufacturing avenues outside of China.
The entrance of an Indian company into iPhone manufacturing holds great potential in challenging China's dominance as the world's factory. Not only will it bolster PM Narendra Modi's "Made in India" campaign, but it could also encourage other international electronics brands to consider setting up production facilities in India, reducing their reliance on China.
With a heritage spanning 155 years, Tata Group's diverse portfolio includes everything from salt to tech services. In recent years, the conglomerate has actively sought to venture into the field of electronics production and e-commerce, both of which are relatively new territories for the Tata family. Apart from the acquisition of Wistron's factory, Tata Group already manufactures iPhone chassis at its expansive facility in Tamil Nadu state, and the group's Chairman N Chandrasekaran has expressed ambitions in chipmaking as well.
While spokespeople for Tata, Wistron, and Apple declined to comment on the matter, industry insiders are eagerly anticipating the official announcement of Tata Group's entry into iPhone assembly, which is poised to reshape India's electronics manufacturing landscape and boost the country's standing in the global technology market.
Overall, this development marks a significant milestone for India's manufacturing sector, signaling the country's growing importance as a manufacturer of high-tech products like iPhones. With Tata Group's entry into iPhone assembly, India has the potential to become a major player in the global electronics industry, rivaling China's dominance. Furthermore, this move aligns with Apple's strategy to diversify its production beyond China, making India an attractive destination for technology manufacturing. As this partnership takes shape, it will be interesting to observe the impact it has on India's economy, as well as the broader implications for global supply chains in the electronics sector.