Pegatron May Sell Its Lone India iPhone Manufacturing Unit To Tata: Report

Tata, one of India's largest conglomerates, will oversee the joint venture through its Tata Electronics division.

The Pegatron India facility, with approximately 10,000 employees, currently manufactures five million iPhones annually.

Source : Getty

Taiwanese contract electronics manufacturer and an Apple iPhone supplier Pegatron is in advanced negotiations to transfer control of its sole iPhone manufacturing facility in India to the Tata Group, a report by news agency Reuters said on Monday, citing two sources familiar with the matter. This move signifies Pegatron's latest scale back in its partnership with Cupertino headquartered Apple.

The report did not disclose the financial details of the ongoing negotiations.

Tata Aims To Acquire 65% Stake

Under the proposed agreement, which has Apple's approval, Tata intends to acquire at least a 65 per cent ownership stake in a joint venture responsible for operating the Pegatron plant near Chennai city in the southern Indian state of Tamil Nadu. Pegatron will offer technical assistance and retain the remaining ownership stake, as stated by one of the sources, the report added.

Tata, one of India's largest conglomerates, will oversee the joint venture through its Tata Electronics division, according to the second source, as mentioned in the report.

The Pegatron India facility, with approximately 10,000 employees, currently manufactures five million iPhones annually. This facility is Pegatron's sole remaining iPhone manufacturing site, following the transfer of control of its Chinese iPhone plant to Luxshare in a $290 million agreement.

Indian conglomerate Tata currently runs an iPhone assembly plant in Karnataka, which it acquired from Taiwan's Wistron last year. Additionally, Tata is constructing another facility in Hosur, Tamil Nadu, where Pegatron is expected to become its joint venture (JV) partner.

Pegatron has been constructing an additional iPhone factory at its Chennai campus for several months. Discussions between Tata and Pegatron regarding the acquisition of this facility are anticipated to conclude within six months.

Upon finalisation, all Pegatron India employees are expected to transition to the joint venture entity. Apple's iPhone manufacturing partners in India presently include Tata, Pegatron and world's biggest contract manufacturer Foxconn. Analysts project that India will account for 20-25 per cent of total iPhone shipments this year, up from 12-14 per cent last year, making Tata crucial to Apple's expansion plans in the country.