iPhone manufacturer Foxconn is planning to invest $700 million to build a factory in the southern Indian state of Karnataka, which could significantly expand the production of Apple’s smartphones in India, Bloomberg reported, and follows claims by Indian officials that Apple wants to shift 25% of its manufacturing to the country amid concerns about China.
According to Bloomberg, Foxconn is planning to build the manufacturing facility on a 300-acre site near the city of Bengaluru—India’s IT hub—where it will manufacture iPhone components and may also assemble the devices.
The factory is expected to employ around 100,000 people, making it around a third the size of the world’s largest iPhone factory in the Chinese city of Zhengzhou.
Foxconn Chairman Young Liu, who is on a tour to India, is visiting Bengaluru on Friday and will attend a dinner hosted by Karnataka’s Chief Minister Basavaraj Bommai.
Foxconn this week announced plans to build another major electronics manufacturing facility in the neighboring state of Telangana—that would also create 100,000 jobs, but it is unclear if that plant will make Apple products.
According to Bloomberg analysts, the new factory near Bengaluru could “boost the country’s share of iPhone assembly to 10-15 % from a sub-5% currently.”
Liu met with India’s Prime Minister Narendra Modi this week and, according to Foxconn, the two discussed the company’s “good progress in the country.”
India’s Commerce Minister Piyush Goyal said in January India already accounts for about 5-7% of the total manufacturing output of Apple’s components and the company is “targeting to go up to 25%.” Goyaldid not say when this would happen, but the number is largely in line with projections made by analysts. Last year, JP Morgan projected Apple will move 5% of global iPhone 14 manufacturing to India by the end of 2022 and that number will rise to 25% of all iPhone manufacturing by 2025.
Despite the Indian government’s enthusiasm, Apple has reportedly been facing quality control issues in its Indian supply chain. The Financial Timesreported last month that only one in every two components coming out of the production line of an iPhone casings factory run by Indian conglomerate Tata is in good enough shape to be sent to Foxconn’s assembly plants. The report attributed some of Apple’s problems in the country to India’s slow-moving bureaucracy, infrastructure limitations, tariffs and logistics.
Foxconn, a Taiwanese firm, is the world’s biggest iPhone manufacturer and most of its plants are in mainland China. There have been talks of Apple expanding its manufacturing in India to offset its reliance on Chinese factories, reportedly due to growing tensions between Beijing and Washington. Foxconn’s reported investments in India are likely an effort to align with Apple’s goals. Apple’s operations in China were also disrupted by Beijing’s harsh anti-Covid lockdowns last year including one which triggered protests at Foxconn’s Zhengzhou factory known as “iPhone city,” where Apple manufactures nearly all of its iPhone 14 Pro and Pro Plus models. This disruption caused Apple to fall short of its production target for the iPhone 14 in 2022 by nearly 6 million units.