Economy
Foxconn May Set Up $200 Million Production Facility In Telangana To Produce Apple AirPods
Foxconn Plant (Representative Image)
Foxconn, the well known Taiwanese contract manufacturer, has been awarded an order from Apple to produce AirPods.
It may soon establish a facility in India dedicated to manufacturing the wireless earphones, according to news reports.
Foxconn will now supply AirPods, which are currently made by Chinese suppliers. This new move is part of Foxconn's efforts to expand and produce products outside of China. Foxconn is known to be the largest contract electronics manufacturer and assembles around 70% of all iPhones.
Foxconn may invest over $200 million in a new AirPod plant in Telangana, India. However, the exact value of the AirPod order is still unknown.
Apple already has plans to revamp sales operations worldwide, designating India as a separate region.
An anonymous source was quoted by news agencies saying that Foxconn had pondered assembling AirPods due to lower profit margins, but ultimately decided to proceed with the deal to strengthen their relationship with Apple.
The person said, "That way, we are more likely to get orders for their new products."
According to the source, it was Apple that requested to establish production facilities in India.
Foxconn competes with Wistron Corp and Pegatron Corp to secure additional orders from Apple, the world's most valuable company.
Foxconn Interconnect Technology Ltd, a subsidiary, intends to construct a production facility in Telangana later this year and commence manufacturing no earlier than 2024, according to an unnamed source.
The anonymous source was further quoted as saying that a subsidiary of Foxconn will produce AirPods in India but did not disclose any additional information, as the matter has not yet been announced publicly.
No information has been formally revealed regarding the investment amount, timeline, or manufacturing plans of suppliers in India.
Foxconn had no comment. Apple didn't respond to comment request.
Apple and its suppliers are moving production out of China to avoid business disruptions caused by Covid-19 restrictions and to reduce the impact of rising trade tensions between the US and China.
Foxconn plans to increase investments in other countries to meet customer needs and reduce dependence on China for manufacturing.
It was not immediately clear if Foxconn's production plan would affect Luxshare Precision Industry and other existing AirPod suppliers.
In November, Goertek Inc, a supplier, reported that an overseas client had requested a suspension of assembly work for a smart acoustic product, identified as AirPods Pro 2, affecting revenue up to $480 million or 3.3 billion yuan.
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