Foxconn to invest up to $1 Billion in new Bengaluru Plant
Foxconnn’s $1 Billion Investment
In India, the world’s second-largest smartphone market, Apple accounts for roughly 1% of smartphone sales, and its costly iPhones are generally considered a status symbol. Building more phones in India will also help Apple save money on import duties, which drive up its costs even further.
According to sources, Foxconn 2317.TW intends to invest up to $1 billion in expanding a facility in southern India where the Taiwanese contract manufacturer assembles Apple AAPL.O iPhones. The move, the magnitude of which has not previously been revealed, is part of Apple’s discreet and gradual shift away from China as it navigates interruptions caused by a trade war between Beijing and Washington, as well as the coronavirus outbreak.
As per sources, there is a strong request from Apple to its clients to move part of the iPhone production out of China. Foxconn stated that it does not comment on customer issues, while Apple did not react to a request for comment. According to the second source, Foxconn’s planned investment in the Sriperumbur facility, where Apple’s iPhone XR is manufactured, 50 kilometres west of Chennai, would be spread out over three years.
Some of Apple’s other iPhone models, which are manufactured by Foxconn in China, will be manufactured at the factory, according to both individuals who declined to be identified because the discussions are private and specifics have yet to be finalised.
According to one of the sources, Foxconn, based in Taipei, would create 6,000 jobs at its Sriperumbur facility in Tamil Nadu state as part of the plan. It also has a second facility in the southern Indian state of Andhra Pradesh, where it manufactures smartphones for companies such as China’s Xiaomi Corp 1810.HK.
Foxconn Chairman Liu Young-way announced last month that the company will increase its investment in India, but no further information was provided. In the southern IT centre of Bengaluru, Apple assembles a few models through Taiwan’s Wistron Corp 3231.TW. Wistron is reportedly planning to build additional Apple products at a new site, according to Reuters.
According to Neil Shah of Hong Kong-based tech analyst Counterpoint, due to India’s labour being lower than in China and the ongoing increase of Apple’s supplier base here, the nation will be able to serve as an export centre.
India is also attempting to increase electronics manufacturing by businesses such as Foxconn, and this month announced a $6.65 billion plan to incentivize five major smartphone producers to start or expand domestic production. The expansion of Apple’s local presence is anticipated to benefit Prime Minister Narendra Modi’s signature “Make in India” initiative, which aims to create new employment. Samsung 005930.KS from South Korea has previously said that its factory outside of New Delhi will produce cell phones for export.
