In order to strengthen its leadership in the supply chain, American technology giant Apple has been seeking industrial chain diversification. Under the attraction of lower labor costs and various incentive measures in India, Apple is extremely ambitious in establishing Indian production capacity.
In this context, Tata Group, India's largest conglomerate, plans to build one of the country's largest iPhone assembly plants. This move is expected to accelerate Apple's manufacturing expansion in India.
According to insiders, Tata Group hopes to build a factory in Hosur, Tamil Nadu, southern India. The factory may have approximately 20 assembly lines and employ 50000 workers within two years, with the goal of being operational within 12 to 18 months.
The new factory is expected to start production at the end of the fiscal incentives previously supported by the Indian government, and Apple and Tata may urge the Indian government to provide subsidies for the new factory.
The establishment of the new factory will help Apple achieve its goal of strengthening "Made in India" and strengthen the cooperation between Apple and Tata Group. Tata has acquired an iPhone factory from Wistron in the neighboring state of Karnataka, Tamil Nadu.
The scale of the new factory will be at a moderate level among global iPhone factories. It may be larger than the factory acquired by Tata Group from Wistron, which has over 10000 employees but is much smaller than Foxconn's largest factory in China, with hundreds of thousands of employees.
Tata Group has also taken other measures to strengthen its business cooperation with Apple. The company has accelerated recruitment at its existing factory in Hosul, which produces iPhone frames or metal casings. Tata also stated that it will open 100 retail stores specializing in Apple products. Apple has currently opened two official retail stores across India and plans to open three more.
Apple is committed to diversifying its supply chain
Indian Prime Minister Modi's production related subsidies have stimulated Apple's major suppliers, such as Foxconn and Asus, to expand their business in India. This helped Apple assemble iPhones worth over $7 billion in India in the previous fiscal year, increasing the market share of iPhones made in India to about 7%.
In August of this year, according to media reports, Apple planned to transfer at least 20% of iPhone production to India. Indian government officials announced in September that Apple plans to increase its output value in India by more than five times over the next five years, reaching $40 billion.
According to media reports on Wednesday, Apple hopes that the batteries of its latest generation iPhone will be manufactured in India, which is also the latest effort by the US technology giant to diversify its global supply chain.
Besides India, Apple is also diversifying its business through partnerships with assembly and component manufacturing partners in Thailand, Malaysia, and other regions.