Apple’s Contract Manufacturers and Component Suppliers in India

We discuss Apple’s strategy of diversifying away from its heavy reliance on Chinese manufacturing and list its contract manufacturers and local suppliers in India.

Apple’s iPhone exports from India rose from US$6.27 billion in the fiscal year 2022-23 to US$12.1 billion in 2023-24. The company’s share in Indian smartphone exports had grown from 9 percent in April-June 2022 to nearly 50 percent in volume terms in Q2 2023, outpacing Samsung to become largest smartphone exporter from India. Around 70 percent of iPhones assembled in India are exported – a figure that is set to increase.

Meanwhile, having taken over Wistron’s operations in India (Karnataka factory), the Tata Group’s Tata Electronics is expanding its iPhone assembly hub at Koothanapalli in Tamil Nadu’s Hosur, which will feature approximately 20 assembly lines. Tata Electronics aims to hire 55,000 workers from 20,000 workers currently – an aggressive plan that could do with its interest in acquiring Pegatron’s sole India unit, near Chennai.

Apple has been assembling smartphones in India through contract manufacturers since 2017. However, until 2022, the Cupertino-based firm had used manufacturing facilities in India primarily for assembling entry-level or legacy handsets. This changed in 2021-22 when Apple started assembling the iPhone 14 models in India.

According to trade intelligence firm The Trade Vision LLC, Apple experienced a remarkable surge in iPhone exports from India, soaring from US$6.27 billion in the fiscal year 2022-23 to US$12.1 billion in 2023-24, marking nearly a 100 percent increase. This substantial growth highlights the increasingly significant role India plays in Apple’s global supply chain. The company reportedly exports 70 percent of its India output, which could increase in future.

The United States was the top importer of smartphones from India, with imports reaching around US$6 billion in FY 2023-24. Among these imports, Apple iPhones accounted for US$5.46 billion, marking a notable rise from US$2.1 billion in FY 2022-23. – Trade Vision

According to Bloomberg, Apple suppliers manufactured iPhones worth US$14 billion in India during FY’24, comprising 14 percent of the global total – that is, around one in seven iPhones worldwide. Apple’s production in India includes iPhone models 12, 13, 14, and 15. Foxconn accounts for the lion’s share of iPhones made in India.

Apple has been diversifying its operations away from China, working with assembly and component manufacturing partners in India, Thailand, Malaysia, and Vietnam, among others. In 2024, Apple will also be actively seeking new suppliers from India, Japan, and South Korea to deliver essential components to its contracted manufacturers based in India. 

According to a report in the Financial Times, Apple has indicated to its component suppliers that the firm wants to procure batteries for the upcoming iPhone 16 from Indian factories. Battery manufacturers, including Desay from China, have received encouragement to set up new facilities in India. Simplo Technology, a Taiwanese battery supplier for Apple, has been urged to increase production in India to meet upcoming orders, according to three individuals familiar with the matter, per the FT.

Meanwhile, Apple has asked the Indian government to exempt its older models from needing to meet the universal charging point standard, stating that it could hamper local production targets tied into incentive schemes. India has been considering mandating a common charging port (Type C USB port) for electronics devices in 2025. The universal charging point was first proposed by the European Union and will be implemented by the end of 2024 leading Apple to switch to the USB-C port from its iPhone 15 series.

Apple scouting for more suppliers in India

Apple, along with its suppliers, aims to produce more than 50 million iPhones annually in India over the next two to three years. The plan includes the production of tens of millions of additional units in the subsequent period.

According to sources, iPhone maker Foxconn has been assembling the iPhone 15 and 15 Plus models at its Sriperumbudur plant in Tamil Nadu. The commercial production of the iPhone 15 commenced at Foxconn’s plant in September 2023, marking the first instance of an iPhone assembled in India being available for sale right from the launch stage.

Apple is also in talks with various suppliers in India’s automotive, aerospace, and consumer electronics sectors to explore potential supplier agreements spanning multiple product categories, according to reporting in the Livemint. Some suppliers are already investing in new capabilities, machinery, and equipment, positioning themselves as potential Apple suppliers pending a comprehensive cycle of certification and approvals, according to Mint’s findings.

Meanwhile, Foxconn and Tata Electronics have been scaling up manufacturing capacity and expanding supply chain presence.

In April, it was being reported by Business Today that “Apple is in advanced discussions with Indian companies Murugappa Group and Tata group’s Titan Company for the assembly of iPhone camera modules”. Both Titan and Murugappa groups are established in high-precision manufacturing. In 2022, Murugappa Group acquired a majority stake in Moshine Electronics, a camera module maker based in Noida. Titan Company, on the other hand, owns Titan Engineering and Automation, serving clients globally in sectors like defence and aerospace. 

Per a Reuters report dated April 8, 2024, Pegatron is in advanced discussions to transfer control of its sole iPhone manufacturing plant in India to the Tata Group, according to two sources familiar with the matter. Under the proposed agreement, which has Apple’s approval, Tata intends to retain a minimum 65 percent ownership in a joint venture responsible for operating the Pegatron facility near Chennai in Tamil Nadu. Pegatron will offer technical assistance and maintain the remaining stake in the venture.

Per a December 27, 2023, report in the Economic Times, it was said that Apple is in advanced talks with components maker Aequs Group (India) and lens maker Rayprus Technologies (subsidiary of Taiwan’s Foxconn). Aequs’ portfolio includes manufacturing high quality toys, consumer durable goods, and aerospace parts while Rayprus Technologies makes high quality precision camera and lens solutions.

Per a December 12 report, American gorilla glass maker Corning, Inc., a key Apple supplier, is setting up a INR 10 billion (US$120.09 million) manufacturing facility in Pillaipakkam (near Sriperumbudur) in Tamil Nadu state. The location puts it in proximity to other Apple suppliers in India, which is why it is said to have finalized investment in Tamil Nadu over Telangana state. Corning, Inc. is a Fortune 500 material sciences company and inventors of the toughened display glass used in phones, tablets, monitors, etc.

Have Apple contract manufacturers benefited from the production linked incentives program?

Apple has benefited from India’s US$4.66 billion production-linked incentives (PLI) scheme for mobile devices as well as support initiatives targeting IT and electronics manufacturing. In its third year, the PLI scheme has likely contributed to the jump in Apple’s iPhone exports from India. Per reporting in the Business Standard, Apple Inc assembled iPhones with a freight-on-board (FOB) value of more than INR 600 billion (approx. US$7.19 billion) in the first seven months of FY 2024 [April to Sept., 2023] through its three vendors. This makes up 81 percent of their combined target of INR 740 billion, committed to under the PLI scheme for mobile devices, with the iPhone exports from India accounting for 70 percent of the amount. The FOB value encompasses the ex-factory cost along with additional expenses such as transportation, warehouse charges, etc., necessary for delivery to the seller.

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iPhone makers Foxconn and Wistron were in fact among the first to file for claims under the PLI program having reached their incentive targets for FY23. To avail incentives for the third year, the government mandated incremental sales of over INR 150 billion / approx US$1.79 billion (each) and a minimum investment of INR 7.5 billion (US$89.95 million) to enhance manufacturing infrastructure that year.

Factories belonging to key contract manufacturers Foxconn and Pegatron, based in Tamil Nadu, along with Wistron (now owned by Tata Electronics) in Karnataka, produce various iPhone models for Apple in India. This production encompasses iPhone models 11, 12, 13, 14, and the newest addition, the iPhone 15. In March, Wistron received INR 6.019 billion (US$72.19 million) in financial incentives under the PLI Scheme for Large-Scale Manufacturing.

Apple market strategy for India

In an interesting development, this year, Apple launched the iPhone 15 in India on the same day as its global release, on September 22, 2023. Also, while the majority of iPhone 15 units is still produced in China, 2023 marked the first time that a newly released, India-assembled device, was made available on its debut sales day. However, India-based plants are not involved in the production of the ultra-premium Pro models.

In April, Apple opened its first official stores in India, with the flagship store at Reliance Jio World Drive Mall in Bandra Kurla Complex, Mumbai and a second store at New Delhi’s Select Citywalk Mall.)

Apple’s market share is projected to hit 6 percent in the calendar year 2023 and 8 percent in 2024, per industry data from CyberMedia Research (CMR).

Tata’s entry into the Apple industrial supply chain in India

Tata Group to almost double capacity of Hosur iPhone casing unit

Tata Electronics of the Tata Group is expanding its iPhone assembly hub at Koothanapalli in Tamil Nadu’s Hosur, and is set to increase its employee strength by 175 percent to 55,000 from a current force of 20,000 per a Business Standard report.

The Hosur factory is being built at an investment of INR 50 billion and spread across 500 acres. The expanded factory will supply iPhone components but may also cater to other high-end phone brands.

Tata’s Wistron takeover

The Tata Group took over Wistron’s assembly operations at Narasapura in Karnataka state’s Kolar district for US$125 million. Prior to this Tata had been producing a semi-finished iPhone SE model and conducting trial runs for parts assembly of the iPhone 15 at the Hosur plant in Tamil Nadu state. (Hosur is located along the River Ponnaiyar, 40km (25 miles) southeast of Bengaluru, Karnataka. The driving distance between Narasapura Industrial Area and Bengaluru is 53km (32.9 miles).)

India’s Minister of Electronics and IT, Rajeev Chandrasekhar, announced news of Tata’s completed takeover of Wistron’s India facility on October 27, 2023, noting the company’s ambitions to produce iPhones for both domestic and global markets.

Tata aims for mass production of the iPhone 15 at 50,000 units per day, leveraging the knowhow and machine capability gained from Wistron’s operations. Speculation is rife amid Reuters reporting that the Tata Group are in advanced talks to acquire a majority stake in Pegatron’s iPhone manufacturing unit and also gain access to the Taiwanese contract manufacturer’s technical expertise.

Who are Apple’s contract manufacturers in India?

Foxconn, Pegatron, and Wistron manufacture ‘end-to-end’ phones in India. Tata is a newcomer to the Apple assembly line and has taken control of Wistron’s operations.

Which Apple component suppliers are located in India?

There are 14 suppliers for the iPhone maker in India as per the company’s 2022 Apple Suppliers Catalog.

Apple component suppliers in India include:

• Cheng Uei Precision Industry Company Limited (Foxlink) – Andhra Pradesh
  The Taiwan company specializes in the design, manufacturing, and sale of connectors, cable assemblies, power management devices, and battery packs on an OEM/ODM basis.
• Flex Limited – Tamil Nadu
  US-based firm provides global supply chain and manufacturing solutions.
• Hon Hai Precision Industry Company Limited (Foxconn) – Tamil Nadu
  The Taiwan firm is a leading global technology manufacturing and services provider and is Apple’s biggest supply chain partner.
• Jabil Incorporated – Maharashtra
  US-based firm makes AirPod components (plastic bodies), which are shipped to Vietnam and China where the AirPod wireless earphones are assembled. Has a 850,000 sq ft plant in the city of Pune and employees around 2,500.
• Molex Incorporated – Karnataka
  US-based firm and a Koch Company, it is involved in IoT infrastructure and is a connectivity innovator. It is a recent entry onto Apple’s India supplier list and has set up a manufacturing facility in Karnataka.
• Lingyi iTech (Guangdong) Company – Tamil Nadu
  The Chinese firm is involved in smart manufacturing, precision functional components, structural components, modules, chargers, adapters, and power management systems. It has a facility in Tamil Nadu.
• ON Semiconductor Corporation – Tamil Nadu
  Onsemi is US-based and a recent entry onto Apple’s India supplier list. The firm is a Fortune 500 company with a manufacturing facility in Tamil Nadu.
• Shenzhen Everwin Precision Technology – Uttar Pradesh
  The China-based firm is involved in the design, production, and distribution of electronics parts and components, with a facility in Uttar Pradesh. It is a recent entry on Apple’s India supplier list.
• Shenzhen YUTO Packaging Technology Company Limited – Karnataka
  China-based supplier with a factory in Bengaluru.
• Sunwoda Electronic Company Limited – Uttar Pradesh
  China-based firm with a facility in Noida.
• Taiwan Surface Mounting Technology Corporation
  Taiwan-based firm with a facility in Tamil Nadu.
• Wistron Corporation – Karnataka [taken over by Tata Electronics]
• Zhen Ding Technology Holding Limited – Tamil Nadu
• Pegatron Corporation – Tamil Nadu

14 Apple component suppliers seek to set up in India: January 2023

As per reporting from Bloomberg on January 18, the Indian government gave initial clearance to 14 of 17 Chinese suppliers submitted by Apple for operating in India. The companies are expected to find a joint venture (JV) partner in India and then seek full approval for setting up. Indian officials have reportedly said they will not allow the Chinese firms to set up a wholly owned entity in India.

The suppliers with initial clearance include Sunny Optical Technology, which already have an India presence as they do business with Xiaomi, Oppo, and Vivo; Han’s Laser Technology Industry Group Co.; and Shenzhen YUTO Packaging Technology Co.

Sunny Opotech, a unit of Zhejiang-based Sunny Optical Technology has reportedly signed a deal with Apple to invest US$300 million to set up an India facility. The firm intends to roll out the project in phases till 2026 but is yet to finalize a location for the facility. Speaking with Businessline, Welly Liu, President of Sunny Opotech India, said the company aims for its new investment to “increase the revenues of the camera module business unit (BU) to $10 billion by 2026 from the present $3.5 billion.” Since the last three years, Sunny Opotech has been making camera modules for Android phones at a Tirupati facility (Andhra Pradesh state) in partnership with Celkon (Seven Hills).

Note: As of November 2023, AirPods and iPhone assembler Luxshare Precision Industry Co. has not been able to expand its India presence, opting instead to shift to Vietnam. The company cited India-China political tensions.

Where are Apple products manufactured in India?

Electronics manufacturing ecosystem in South India

All three of Apple’s major contract manufacturers have operations located in the southern Indian state of Tamil Nadu. The state is a national powerhouse when it comes to electronics and hardware – accounting for 20 percent of the national production. The state is aiming to increase the share to 25 percent and enhance the industry’s output to US$100 billion by 2025 through the promotion of special economic zones (SEZs).

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Tamil Nadu has two exclusive SEZs for electronics and hardware manufacturing – at Sriperumbudur and Oragadam in the Kancheepuram District. State and central government incentives, along with an abundance of skills in the region, have contributed to the Taiwanese firms setting up their operations in the state.

According to reports, the state of Tamil Nadu is home to 16 major electronics producers, including Nokia, Samsung, Flex, Dell, Salcomp, and HP.

Foxconn’s recent investment plans across South India

• The Karnataka state government greenlit a US$967.91 million Foxconn proposal in March 2023 to set up a facility under its Indian unit. It is expected to produce iPhones for Apple.
• On May 15, Foxconn held a ground-breaking ceremony of a new manufacturing facility to be set up in the southeastern state of Telangana, at Kongara Kalan at the outskirts of capital and IT hub Hyderabad. Foxconn is said to investment US$500 million in the state. Land parcel of 196 acres has been allotted by the state government and 25,000 direct jobs could be generated in the first phase of the plant’s operation. It is speculated that Foxconn could produce AirPods for Apple at the plant. Apple has requested Foxconn to expand its manufacturing capacity for the firm. Foxconn, per media reports, is moving forward despite the tighter margins as India works on bolstering its electronics production ecosystem. Apple is a longtime client and Foxconn is invested in the continued engagement.

Foxconn is the world’s largest technology contract manufacturer and its India facilities take orders for multiple electronics brands. Foxconn now has investments across South India – in Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu.

Investment by subsidiary Foxconn Industrial Internet

On August 2, Foxconn signed a Letter of Intent (LoI) with the Karnataka government to establish two additional projects, with an estimated combined investment of INR 50 billion. The first of the newly proposed projects deals with the mechanical enclosures of iPhones, and is managed by Foxconn Industrial Internet (FII), a subsidiary of Foxconn, committing to invest around US$350 million.

India wants to become an integral part of the Apple supply chain

India aims to integrate itself into Apple’s supply chain, with ambitious predictions from analysts foreseeing a significant increase in iPhone production capacity. Forecasts range from 25 percent of global production by 2025 (JPMorgan) to 50 percent by 2027 (Taiwan’s DigiTimes). Despite these optimistic projections, over 90 percent of iPhones are currently manufactured in China, where Apple has established a robust supply chain spanning nearly two decades. Presently, India contributes to seven percent of Apple’s iPhone production.

Koushan Das, Assistant Manager at the Business Intelligence division at Dezan Shira & Associates notes, “We have already seen an increase in the production volume for phones in the existing facilities in India. Going forward, contract manufacturers will continue to ramp up local production in India, but it is also expected that several suppliers will join to ensure smoother operations. Already a few suppliers are in talks with the government – now picked up by international media – although these suppliers also provide components to other brands justifying their shift to India.”

Das predicts that Apple could move the production of additional products from its portfolio, such as tablets, earphones, or laptops, to India, though the decision will face stiff competition from Southeast Asian production hubs.

“For companies positively considering a move to India, the country offers various options with respect to location, as states continue to compete in areas such as incentives offered, skilled workforce, government support, and an easier land acquisition process”, he added.

Reducing production reliance on China

Apple, like many Western companies, aims to reduce its reliance on China for production, prompted by the ongoing US-China trade war and the consideration of geographical de-risking strategies in supply chain decision-making.

The COVID-19 pandemic also served as another tipping point in favor of diversified supply chains rather than concentration in any single market. For example, Apple’s contract manufacturer, Foxconn, had to halt operations at its Zhengzhou assembly plant in November 2022 due to Beijing’s Covid-zero approach, resulting in warnings of delayed global shipments.

Previously, seeking alternatives to China was influenced by the country’s rising labor costs.

Nevertheless, Apple’s large-scale move out of China will not be anytime soon as it relies on key manufacturing and assembly partners in the country like Luxshare Precision (maker of AirPods, the Apple Watch, iPhone 15, and iPhone Pro Max, and assembler of the MR headset).

Further, geopolitics may also impact investments from Chinese companies in Apple’s supply chain in India. For example, Luxshare reportedly decided to invest US$330 million [in November 2023] in Vietnam’s northern province of Bac Giang only after many failed attempts to expand its operations in India due to political tensions.

Around the same time, India finally announced fresh rules aimed at expediting visa approvals for Chinese nationals employed in PLI sectors. FDI from China is closely vetted by India’s security establishment.

China plus one: India faces competition from Southeast Asia

While India offers advantages such as a wealth of low-cost labor and government incentives, challenges in workforce training and social factors must be addressed. Southeast Asian nations, exemplified by Vietnam, present attractive alternatives for electronics and hardware production, leveraging abundant and affordable labor forces, OEM/ODM networks, and proximity to China.

This article was originally published January 17, 2023. It was last updated April 17, 2024.

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