Apple Supplier Pegatron Is In Talks To Establish Second Factory In India: Report

Apple Inc's Taiwanese supplier Pegatron Corp is in negotiations to establish a second India plant, as the US tech giant's partners continue to diversify production away from China, according to two sources with direct knowledge of the matter.

According to the sources, Pegatron intends to establish a second facility near the southern city of Chennai in Tamil Nadu state, just six months after opening the first with a USD 150 million investment.

According to the first source, the new factory will “assemble the latest iPhones.”

Pegatron declined to remark, but stated that “any asset acquisition will be disclosed in accordance with regulations.”

Apple sees India as a growing market. According to the India Cellular and Electronics Association, approximately USD 9 billion in cell phones were exported from India between April 2022 and February this year, with iPhones accounting for more than half of that total.

According to research firm Counterpoint, Pegatron currently makes up 10 per cent of Apple's iPhone production in India on an annualised basis.

Apple and its key suppliers have been shifting production away from China in order to avoid a possible business hit from rising Sino-US trade tensions. Pegatron has recently tried to expand its presence in Southeast Asia and North America.

The company is in talks to start a second Pegatron facility on a lease, which will be located inside Mahindra World City near Chennai, close to where the first plant was inaugurated in September 2022.

The amount, Pegatron intends to spend on the expansion is not immediately clear. According to the first source, the second factory will be smaller than the first.

Since beginning iPhone assembly in the country in 2017 via Wistron and subsequently Foxconn, Apple Inc has wagered big on the South Asian nation, in line with the Indian government's drive for local manufacturing.

India is the world's second-largest smartphone market and Apple intends to manufacture iPad devices and AirPods there as well.

The Indian state of Karnataka announced this week that it has authorised a USD 968 million investment by Foxconn, which will result in the creation of 50,000 jobs.

According to Reuters, Foxconn plans to construct a USD 200 million factory in India to manufacture wireless earphones for Apple after securing a contract. It already assembles some iPhone models at its Tamil Nadu factory.