Pegatron, Apple’s Second Largest Contract Manufacturer, In Talks With Many Indian States For Setting Up A Factory: Report

Taiwanese component maker, Pegatron, which is also Apple's second-largest contract manufacturer, is likely to set-up a manufacturing plant for iPhones in India in a bid to expand its production capacity outside mainland China, The Economic Times reported.

Citing sources privy to the development, ET reported that Pegatron has registered its India subsidiary in Chennai and is currently in discussions with various state governments to find land to set up factories after which they would import plant and machinery.

The product lines of Pegatron, a Taipei-based electronic manufacturing behemoth, include notebooks, netbook computers, desktop computers, game consoles, handheld devices, motherboards, video cards, LCD TVs, as well as broadband communication products such as smartphones, set-top boxes and cable modems.

Besides announcing plans to build a new facility in its home country, Pegatron also opened a new factory in Indonesia last year and plans to develop production capacity in Vietnam in 2021.

In a bid to diversify and derisk their global supply chain, big electronic manufacturing firms including Wistron, Foxconn, Inventec, and Pegatron are all looking to expand their supply lines outside China.

Taipei-based multinational Foxconn that assembles most of the world’s iPhones, announced its decision to start mass-producing the popular handset in its Indian plants.

In what is likely to be a major boost for Prime Minister (PM) Narendra Modi's Make in India pitch and push for the building of an Aatmanirbhar Bharat, Foxconn is set to unveil a plan to invest $1 billion in India. The investment is set to take place over three years, which is within the time frame for the Indian government’s new production-linked incentive (PLI) scheme.

Foxconn's massive investment is expected to be channelled into Tamil Nadu's Sriperumbudur where it already has a plant where it manufactures Apple's iPhone XR. The plant is located just about 50 kilometres from Chennai. The investment is likely to create as many as 6,000 skilled jobs. Foxconn already operates a separate plant in neighbouring State of Andhra Pradesh (AP)'s Sri City where it manufactures smartphones for Chinese company Xiaomi Corp and others.

Last month, the Modi government had unveiled the Rs 41,000-crore production-linked incentive (PLI) scheme that aims to make India a major production hub for exporting mobile phones is getting a positive response from the mobile phone manufacturers. Foxconn and Winstron are said to have applied for the scheme.

Other major global players in the mobile manufacturing including South Korean Samsung and Singapore-based Flextronics are also expected to submit their applications for the PLI scheme soon. Besides, Indian companies like Lava, Dixon Technologies and Karbonn have applied for the scheme so far.

The firms can apply till 31 July and the announcement of the selected companies will be done by early August.

Five global and five local companies will be selected initially for the scheme.

Another Taiwanese manufacturer Wistron, which makes for Apple exclusively, has a presence in India already with a factory in Bangalore.