Mumbai: Tata Group, India’s largest conglomerate, is on the verge of acquiring an Apple Inc supplier’s factory, positioning itself as the first local company to venture into iPhone assembly. The deal is expected to be finalized as early as August, according to insiders familiar with the matter.
The Wistron Corp factory located in southern Karnataka state is the target of the takeover, with a potential valuation surpassing $600 million. Sources, who spoke on condition of anonymity due to the confidentiality of the matter, revealed that negotiations have been ongoing for about a year. The factory currently employs over 10,000 workers responsible for assembling the latest iPhone 14 model.
As part of the agreement, Wistron has committed to shipping iPhones worth a minimum of $1.8 billion from the factory during the fiscal year ending in March 2024. This commitment helped secure state-backed financial incentives for Wistron. Furthermore, the factory’s workforce is planned to be tripled by next year. Tata Group intends to honor these commitments while Wistron exits the iPhone business in India.
Representatives from Tata, Wistron, and Apple declined to provide any comments on the matter.
The inclusion of an Indian iPhone manufacturer is expected to bolster Apple’s endeavors to diversify its production beyond China and enhance its technology manufacturing capabilities in India. Wistron has already exported nearly $500 million worth of iPhones from India in the quarter ending on June 30, and Apple’s other prominent Taiwanese suppliers, Foxconn Technology Group and Pegatron Corp, have also expanded their local operations.
Under Prime Minister Narendra Modi’s initiatives, India has made significant strides in domestic manufacturing by implementing lucrative financial incentives to boost production and employment. In light of China’s Covid lockdowns and escalating tensions between the US and China, Apple has intensified its efforts to reduce its reliance on China.
An Indian company manufacturing iPhones could present a substantial opportunity for Modi to challenge China’s position as the global manufacturing hub. It may also encourage other international electronics brands to explore production possibilities in India as a means to diversify their supply chains and decrease dependence on China.
The Tata Group, established 155 years ago, operates across various sectors ranging from salt to tech services. In recent years, the conglomerate has sought to expand its presence in electronics manufacturing and e-commerce, which are relatively new territories for the Tata family. The group currently produces iPhone chassis, the metal framework of the device, at its expansive factory in Tamil Nadu state. Additionally, Chairman N Chandrasekaran has expressed the group’s aspirations in the chipmaking industry.