Apple supplier Foxconn is set to expand production in India

March 7, 2023 6:48 am

Apple supplier Foxconn is set to expand production of iPhones at its existing plant near Chennai, in the southern Indian state of Tamil Nadu, The Wall Street Journal reported on March 4, citing people familiar with the matter.

It aims to boost iPhone production to about 20 million units a year by 2024 and roughly triple the number of workers to 100,000, the report said. The plant currently produces about 6 million units.

According to the report, Foxconn also plans to build a new production facility in the southern Indian state of Karnataka, where it plans to manufacture various products, including iPhones. The company is also considering constructing a new production site in the southern city of Hyderabad as well as a silicon carbide fabrication plant and packaging facility in India for its semiconductor business. 

Foxconn Chairman Liu Yanji visited India last week and met Prime Minister Narendra Modi in New Delhi. In recent years, the Modi government has rolled out a series of fiscal incentives to attract advanced manufacturing and boost employment in the country.

Apple has established a significant manufacturing presence in China, primarily due to the country's vast supply of skilled labor, infrastructure, and manufacturing expertise. Currently, the country remains a key hub for the production of iPhones and other Apple devices.

In recent years, however, the US tech giant and its suppliers have been trying to diversify their supply chains and avoid relying solely on China, with the main locations of interest for expansion being India and Vietnam, where Apple and its supply chain partners already have sizable production bases. Eventually, Apple is expected to shift up to 40% of its iPhone production from China to other countries.

Still, moving iPhone production out of China is a complex process that will take a long time, given that the supply chain infrastructure that suppliers have built locally over the past few decades cannot be easily replaced by other countries.