Pegatron reportedly in talks to open second factory ‘to assemble latest iPhones’ in Tamil Nadu

Apple’s Taiwanese supplier Pegatron is in talks to open a second factory in India, two sources with direct knowledge of the matter said, as the US tech giant’s partners continue to diversify production outside of China. China.

Pegatron plans to add a second facility near the southern city of Chennai in the state of Tamil Nadu, just six months after the first opened with an investment of $150 million (about Rs 1,236 crore), said the sources, who requested anonymity during the talks. private.

The new factory, according to the first source, is “to assemble the latest iPhones”.

Pegatron declined to comment but said, “Any asset acquisitions will be disclosed as required by regulation.”

Apple did not respond to a request for comment.

India is seen as the next growth frontier for Apple. About $9 billion (around Rs 78,303 crore) worth of smartphones were exported from India between April 2022 and February this year, and iPhones accounted for more than 50% of that, according to the India Cellular and Electronics Association.

Pegatron currently accounts for 10% of Apple’s iPhone production in India on an annualized basis, research firm Counterpoint said.

Apple and its major suppliers have moved production out of China as they seek to avoid potential business impact due to growing trade frictions between China and the United States. In recent years, Pegatron has sought to expand its presence in Southeast Asia and North America.

Talks to start a second leased Pegatron facility are underway and it will be located inside Mahindra World City near Chennai, right next to where the company opened the first factory in September 2022.

Pegatron’s planned capital expenditures for the expansion aren’t immediately clear. The first source, however, said the new plant will be smaller than the first.

Apple has been betting big on the South Asian nation since it began assembling iPhones in the country in 2017 through Wistron and later Foxconn, in line with Indian government pressure for local manufacturing.

India is the second largest smartphone market in the world, where Apple also plans to assemble iPad tablets and AirPods.

The Indian state of Karnataka said this week that it had approved a $968 million (about Rs 7,978 crore) investment by Foxconn, leading to the creation of 50,000 jobs.

Last week, Reuters reported that Foxconn planned to build a $200 million (about Rs 1,648 crore) factory in India to produce Apple’s wireless headphones after winning a contract. It already assembles some iPhone models in its factory located in Tamil Nadu.

© Thomson Reuters 2023

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