iPhone Maker Pegatron in Second India Factory Negotiations

Pegatron has sought to expand its footprint in Asia and North America. Photo: Reuters

Taiwanese Apple supplier Pegatron is reportedly in talks to establish a second plant in India as the US tech giant’s supply line continues to navigate away from China.

Sources claim Pegatron, which currently makes up 10% of Apple’s iPhone annual production in India, intends to establish the facility near the southern city of Chennai in Tamil Nadu state, just six months after opening the first after a $150 million investment.

According to the first source, the new factory will “assemble the latest iPhones”.

Pegatron declined to comment, but said that “any asset acquisition will be disclosed in accordance with regulations.”

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Apple sees India as a growing market and according to the India Cellular and Electronics Association, approximately $9 billion in cell phones were exported from India between April 2022 and February this year, with iPhones accounting for more than half of that total.

Apple and its key suppliers have been shifting production away from China as Sino-US trade tensions continue to escalate. Pegatron has recently tried to expand its presence in Southeast Asia and North America.

The company is in talks to start the second Pegatron facility on a lease, which will be located inside Mahindra World City near Chennai, close to where the first plant was inaugurated in September 2022.

Since beginning iPhone assembly in the country in 2017 via Wistron and subsequently Foxconn, Apple Inc has wagered big on the South Asian nation, in line with the Indian government’s drive for local manufacturing.

India is the world’s second-largest smartphone market and Apple intends to manufacture iPads and AirPods there as well.

The Indian state of Karnataka announced this week that it has authorised a $968 million investment by Foxconn, which will result in the creation of 50,000 jobs.

According to Reuters, Foxconn plans to construct a $200 million factory in India to manufacture wireless earphones for Apple after securing a contract. It already assembles some iPhone models at its Tamil Nadu factory.

Reuters with additional editing by Sean O’Meara

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.