Potential Acquisition Signals Growing Role of Indian Companies in iPhone Manufacturing
In a strategic move reflecting the shifting landscape of iPhone production, the Tata Group is currently engaged in advanced discussions to acquire a majority stake in Pegatron’s iPhone manufacturing unit near Chennai. With negotiations reaching a crucial stage, the deal, anticipated to be finalized within the next two to three months, underscores the increasing prominence of Indian entities in Apple’s supply chain.
Experts speculate that the transaction, mirroring Tata’s previous acquisition of Wistron’s local operations, could significantly impact India’s smartphone manufacturing ecosystem. While Wistron’s acquisition amounted to $125 million, the Pegatron deal is expected to be of a similar nature, albeit with adjustments considering Pegatron’s comparatively smaller scale and the remaining duration of the production-linked incentive (PLI) scheme.
The move aligns with Apple’s broader strategy to diversify its manufacturing footprint away from China and bolster its presence in India, the world’s second-largest smartphone market. The emergence of Indian champions in mobile phone manufacturing, as highlighted by Minister Ashwini Vaishnaw, underscores the country’s potential to become a significant contributor to Apple’s global supply chain.
Pegatron, a Taiwan-based contract manufacturer, currently employs around 9,500 individuals in India and produces approximately 4.5 million iPhones annually. Its potential acquisition by Tata Group signifies a crucial milestone in India’s journey towards becoming a key player in iPhone production, complementing the existing dominance of Foxconn in the market.
Both Pegatron and Tata Group, alongside Apple, have refrained from commenting on the ongoing negotiations. However, the potential acquisition holds significant implications for the local workforce, with Pegatron employees expected to transition to the new entity upon completion of the deal.
Apple’s emphasis on nurturing a comprehensive supplier ecosystem in India extends beyond iPhone production, encompassing various components and sub-assemblies. With the involvement of Indian companies like Tata Electronics, Apple aims to strengthen its local manufacturing capabilities, further solidifying its position in the Indian market and mitigating geopolitical risks associated with over-reliance on China.
As negotiations progress, the potential acquisition of Pegatron’s iPhone unit by Tata Group marks a pivotal moment in India’s manufacturing landscape, signaling broader implications for the country’s economy and its role in the global technology supply chain.
