iPhone-Maker Foxconn Plans To Set Up New Plant In India For $700 Million: Report

Foxconn Technology Group plans to build the facility to make iPhone parts on a 300-acre site close to the airport in Bengaluru

Foxconn's plan of setting up a new plant in India will underscore an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.

Foxconn Technology Group, Apple Inc’s manufacturing partner, plans to invest about $700 million on a new facility in India to ramp up local production, citing some sources privy to the development news agency Bloomberg reported. This move, according to the sources, will underscore an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.

According to the report, the Taiwanese company, also known for its flagship unit Hon Hai Precision Industry Co., plans to build the plant to make iPhone parts on a 300-acre site close to the airport in Bengaluru.

The Indian unit may also assemble Apple’s handsets and Foxconn may also use the site to produce some parts for its nascent electric vehicle business, the sources told Bloomberg.

This investment is one of Foxconn’s biggest single outlays to date in India and underscores how China’s at risk of losing its status as the world’s largest producer of consumer electronics. Apple and other US brands are leaning on their Chinese-based suppliers to explore alternative locations such as India and Vietnam. It’s a rethink of the global supply chain that’s accelerated during the pandemic and the war in Ukraine and could reshape the way global electronics are made.

Sources said the new production site in Bengaluru is expected to create about 100,000 jobs. The company’s sprawling iPhone assembly complex in the Chinese city of Zhengzhou employs some 200,000 at the moment, although that number surges during peak production season.

Output at the Zhengzhou plant plunged ahead of the year-end holidays due to Covid-related disruptions, spurring Apple to re-examine its China-reliant supply chain. Foxconn’s decision is the latest move that suggests suppliers may move capacity out of China far faster than expected.

The plans could still change as Foxconn is in the process of finalising investment and project details, the people said. It’s also unclear if the plant represents new capacity, or production that Foxconn is shifting from other sites such as its Chinese facilities.

Apple, however, declined to comment on Bloomberg’s request. Hon Hai, whose chairman Young Liu met Prime Minister Narendra Modi this week, did not immediately respond to an email seeking comment. The Karnataka government also did not immediately respond. Liu, who is on tour in India, has committed to another manufacturing project in Telangana.

Foxconn’s call would be a coup for Modi government, which sees an opportunity to close India’s tech gap with China as Western investors and corporations sour on Beijing’s crackdowns on the private sector. The government has offered financial incentives to Apple suppliers such as Foxconn, which began making the latest generation of iPhones at a site in Tamil Nadu last year. Smaller rivals Wistron Corp. and Pegatron Corp. have also ramped up in India, while suppliers such as Jabil Inc. have begun making components for AirPods locally.