Tata Group Inches Closer To Acquire India's iPhone Plant: Report

The deal would give India its first home-grown iPhone maker as Tata Group is looking to complete the purchase by the end of March from Taiwan’s Wistron Corp

Tata Group aims to complete a due diligence process by March 31 so that its Tata Electronics arm can formally take over Wistron’s position in a programme that gives it government incentives. ( Image Source :Getty )

Tata Group is inching closer to acquire a major plant in India in a deal that would give the country its first home-grown iPhone maker, reported Bloomberg.

Citing sources aware of the development, Bloomberg said the Indian conglomerate has been in talks with the factory’s owner, Taiwan’s Wistron Corp., for months, and is looking to complete the purchase by the end of March. The two firms discussed various potential tie-ups but talks have now centered on Tata taking a majority of a joint venture, the people said. Tata is set to oversee the main manufacturing operation, with support from Wistron, the sources said.

Apple Inc.’s iPhones are mainly assembled by Taiwanese manufacturing giants such as Wistron and Foxconn Technology Group. Tata’s deal would advance India’s efforts to create local contenders to challenge China’s dominance in electronics, which has been jeopardised by political tensions with the US and Covid-related hurdles.

Tata Group aims to complete a due diligence process by March 31 so that its Tata Electronics arm can formally take over Wistron’s position in a programme that gives it government incentives, one of the people said. The next cycle of incentives will begin from April 1, which marks the start of India’s financial year.

The acquisition could value Wistron’s only iPhone manufacturing operation in India at more than $600 million if the Taiwanese company meets the requirements to receive the expected incentives for the current financial year, one of the sources said.

Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron Corp. It has sought to diversify its business beyond thin-margin iPhone manufacturing into areas such as servers, agreeing to sell its iPhone production business in China to a competitor in 2020.

Yet even as Wistron plans to exit iPhone-making in India, its Taiwanese peers are expanding their iPhone production lines. Apple, the world’s most profitable smartphone maker, is seeking to reduce its dependence on China, where pandemic-related supply chain snarls and draconian restrictions have wrought havoc on device production.

Wistron’s 2.2 million square-foot factory is located just over 30 miles (50 kilometers) east of Bangalore. If the acquisition goes through, Tata will take over all its eight iPhone lines, as well as the plant’s 10,000 workers, including a couple thousand engineers. Wistron would continue as a service partner for iPhones in India.

Tata has taken other steps to increase its business with Apple. It has accelerated hiring in its factory in Hosur, near Bangalore, where it produces iPhone components. That plant stands on several hundred acres of land where Tata could add iPhone manufacturing lines in the coming years. Tata has also announced that it will launch 100 Apple stores in India, the first of which is set to open in Mumbai this quarter.

In the past couple of years, Chairman Natarajan Chandrasekaran has accelerated efforts to make the group more tech-centric with a slew of e-commerce initiatives and a new super-app called Tata Neu. The group is also set to enter chipmaking, he said last year.