Foxconn plans to invest up to US$ 1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles Apple iPhones.
This is can be considered as a move by the company to shift its base because of the disruptions from a trade war between Beijing and Washington and the coronavirus crisis.
“There’s a strong request from Apple to its clients to move part of the iPhone production out of China,” according to one of the sources with direct knowledge of the matter.
Though, there was no official statement by Foxconn or Apple regarding the matters.
The investment is planned over the course of next three years in the Sriperumbur plant, where Apple’s iPhone XR is made some 50 km west of Chennai. It is expected to manufacture other iPhones models at the plant.
Foxconn is headquartered in Taipei and will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan. The company also operates a separate plant in the southern Indian state of Andhra Pradesh, where it makes smartphones for China’s Xiaomi Corp, among others.
Last month, Foxconn Chairman Mr Liu Young-way has said it would ramp up its investment in India, without giving details.
In India, the world’s second-biggest smartphone market, Apple holds about 1 per cent of smartphone sales here. iPhones is status symbol in India because of its pricey nature.
This move is also expected to help Apple save on import taxes that further push up its prices.
Apple assembles a few models through Taiwan’s Wistron Corp in the southern tech hub of Bengaluru. Wistron is also set to open a new plant, where it plans to make more Apple devices.
“With India’s labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub,” Mr Neil Shah of Hong Kong-based tech researcher Counterpoint said.
The government of India has been working to boost electronics manufacturing by firms such as Foxconn and launched a US$ 6.65 billion plan last month, offering five global smartphone makers incentives to establish or expand domestic production.
This is move of manufacturing locally is expected to be a boost for Prime Minister Narendra Modi’s flagship “Make in India” drive, aimed at creating new jobs.