Taiwan’s Foxconn has won an order to make AirPods for Apple and is planning to build a $200 million factory in India to produce the wireless earphones, a source claims.
The deal will see Foxconn, the world’s largest contract electronics maker and assembler of around 70% of all iPhones, become an AirPod supplier for the first time and underlines efforts by the key Apple supplier to further diversify production away from China. AirPods are currently made by a range of Chinese suppliers.
One source said Foxconn will invest more than $200m in the new India AirPod plant in the southern Indian state of Telangana.
The decision to set up production in India was requested by Apple, according to the source.
A subsidiary, Foxconn Interconnect Technology Ltd, plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024 at the earliest, the person said.
Shares in the Foxconn unit jumped nearly 9% after Reuters first reported the news, reversing an earlier loss of 2.2%. Shares in Foxconn itself traded up 0.5%, while the Taipei benchmark was down 1.1%.
Apple and its key suppliers have been shifting production away from China, where strict Covid-19 curbs disrupted Foxconn’s biggest iPhone factory last year. They are also seeking to avoid a potential hit to business from mounting Sino-US trade friction.
Foxconn said on Wednesday it would ramp up investment outside China to meet customer demand and lower its reliance on China for production.
It was not immediately clear whether Foxconn’s production plan would have impact on current AirPod suppliers, including Luxshare Precision Industry.
Goertek Inc, another supplier, said in November an overseas client had asked it to suspend assembly work for a smart acoustic product, which analysts at the time identified as AirPods Pro 2, and the suspension would hit revenue by up to $480 million.
- Reuters with additional editing by Sean O’Meara