Pegatron, Apple’s second-largest contract manufacturer, has registered a subsidiary in India, setting the stage for expanding the manufacturing capacity of iPhones in the country, amid heightened US-China tensions.
“Pegatron has registered its India subsidiary in Chennai,” a person familiar with the development told ET. “Currently, the company’s officials are in discussions with multiple state governments to find land to set up factories after which they would import plant and machinery.”
Pegatron couldn’t be reached for a comment. Apple didn’t respond to ET’s emailed queries.
The over $45-billion Taiwanese contract manufacturer is one of three global makers of iPhones for Apple. The other two – Wistron and Foxconn – are already present in India.
The move signals Apple’s push to diversify its supply chain out of China. India is hoping to attract companies that are looking for alternative manufacturing bases and the government in April launched a slew of incentives including a Rs 41,000-crore production linked incentive (PLI) programme to incentivise large electronic manufacturers to set up production bases in the country.
Pegatron, which is Taiwan’s second-largest contract manufacturer after Hon Hai Precision Industry, better known as Foxconn Technology Group, makes notebooks, desktops, motherboards, tablet devices, game consoles, LCD TVs, multimedia players, smartphones, broadband and networking devices.
ET had reported in its May 11 edition that Apple was looking to shift a significant chunk of its iPhone production out of China to India. Meanwhile, Pegatron CEO Liao Syh-jang had said during an investor call in March that the company would expand its overseas production facilities depending upon the client’s wishes and incentives offered by the governments abroad.
Apple’s turnover in India last year was approximately $1.5 billion. IPhones accounted for less than $1 billion, of which only a small percentage here was locally manufactured. Out of the models sold here, Wistron and Foxconn locally manufacture iPhone 7 and XR. The company has a market share of just 2-3%, but is a leader in the premium phones category.
Apple’s footprint in China is significantly greater. It is one of the country’s top investors and in 2018-19, the market value of its electronic merchandise produced there was upwards of $200 billion, a vast majority of which was exported.
News Source: Economic Times