Foxconn, one of Apple’s top suppliers, plans to expand into India

New Delhi – Apple a company

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The main manufacturer, Foxconn Technology GroupAnd

It is considering significant expansion in India, including the possibility of assembling millions more iPhones and setting up new production sites as it seeks further diversification outside of China.

People familiar with the matter said Foxconn is set to expand production of iPhones at its existing factory near Chennai, in the southern Indian state of Tamil Nadu. And the people, including a senior Indian government official, said it aims to increase iPhone production to about 20 million units per year by 2024, and nearly triple the number of workers to as many as 100,000.

People familiar with the matter said Foxconn is also planning to build a new production facility in the southern state of Karnataka, where it will make products including iPhones.

In addition, Foxconn is considering building a new production site in the southern city of Hyderabad as well as a silicon carbide manufacturing plant and packaging facility in India for its semiconductor business, some people said.

Foxconn’s expansion plans are under consideration and may change.

Foxconn Chairman Young Liu visited Bengaluru, in Karnataka state, and Hyderabad during a visit to India this week, while he also met Prime Minister Narendra Modi in New Delhi. Modi’s government has offered billions of dollars in incentives in recent years to attract global manufacturers to India, as part of a major push to boost advanced manufacturing jobs and reduce reliance on electronics imports.

Apple faces an uphill battle as it plans to shift its production outside of China. Here’s why it’s so hard to replicate Foxconn’s “iPhone City” in Zhengzhou and the company’s delicate ecosystem in countries like India and Vietnam. Photo: Karen Dias/Bloomberg News

Apple is pushing suppliers to diversify outside of China after many of them faced production disruptions in China multiple times during the Covid-19 lockdowns. Meanwhile, geopolitical tensions have escalated between the United States and China, as well as between Beijing and Taiwan, where Foxconn is headquartered. Beijing considers Taiwan, a democratically governed island near mainland China, to be part of its territory.

China has been the largest manufacturing hub in the electronics supply chain for years, with Apple being a major driver after building up much of the country’s supply chain and assembly over the past two decades.

Concerns about this reliance mounted after protests erupted at the world’s largest iPhone production site in Zhengzhou, central China, late last year as frustration grew among workers over strict anti-epidemic policies and wages.

However, expanding into India will not mean companies like Apple and Foxconn leaving China, supply chain executives say. They say the supply chain infrastructure these companies have built over the past decades cannot be easily replaced by other countries. China also has a large workforce and manufacturing experience.

Despite strides in domestic auto and smartphone production in recent years, India has long lagged behind regional rivals in advanced manufacturing due to concerns about the country’s tough bureaucracy, protectionist rules and underdeveloped infrastructure.

A spokesperson for Foxconn, formally known as Hon Hai Precision Industry Co., declined to comment. Commenting on the plan, he said the company does not comment on specific customers or products. Apple did not immediately respond to a request for comment.

Bloomberg reported earlier about Foxconn’s expansion plan in Karnataka.

Mr. Liu’s visit to India came just days after he visited Zhengzhou to visit Foxconn’s iPhone production campus, meet workers there, as well as meet with local senior officials.

India, along with Vietnam, has already been identified by Apple as a major destination with the Cupertino-based company seeking to diversify the locations in which its products are assembled. The Wall Street Journal reports that Apple has asked its suppliers to more actively plan assembly of its products outside of China and elsewhere in Asia, particularly India and Vietnam.

Contract manufacturers based in Taiwan including Foxconn and Wistron corp.

In recent years, it has set up factories in India to produce iPhones mainly for the country’s domestic market.

The magazine reports that Apple has also worked with contract manufacturers in India to speed up the production process to reduce the usual delay between when devices are made in China and when they are produced in India.

Write to Rajesh Roy at [email protected], Yoko Kubota at [email protected] and Philip Wen at [email protected]

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