Pegatron in talks to open second iPhone factory in India

by Jonny Evans · March 24, 2023

This is Ecr Beach, just outside Chennai in India

Yes, really, more news from India as the Apple supply chain intensifies building out an alternate manufacturing base there. This time it’s all about Apple iPhone supplier, Pegatron, which now plans a second factory in India.

Pegatron builds its manufacturing base

This is the news: Pegatron is discussing taking a second factory lease in the Chennai region. It invested $150 million in the iPhone factory it already has in India, which opened last year.

Now it wants to ramp up its capacity and is discussing taking a lease in a new facility close to the existing plant in Mahindra World City, Chennai. That’s not too far from the existing plant but will apparently not be as large.

The factory, we’re told by Reuters, will build “the latest” iPhones.

As you might expect, the company has made little comment on these proposals, beyond saying any such investment will be disclosed within financial reporting. Pegatron makes around 10% of Apple’s India-made iPhones.

Watching the charm at work

Apple’s big adventure in India is accelerating. In the coming weeks the first India-based flagship Apple retail store will open there, followed by another, and the company is thought to have already made c.$5 billion value of iPhones that have been exported from India across the last year.

This latest news follows the now familiar trickle of reports from out of India, including recent claims Foxconn will invest both a billion dollars in its own factory in Karnataka state and a second $200 million production facility for AirPods. These factories supplement its existing plant in Tamil Nadu.

In other news

There’s a little more going on in the background.

One way India is stimulating smartphoe production in the nation is through eh provision of a Production Linked Incentive (PLI) scheme. A report on the Business Standard claims this was extended to local makers as well as to Apple and Samsung, but only two of the local names have managed to meet targets.

(And Apple has also raised all the boats in terms of local smartphoe sales prices and dominates the premium smartphone market in India).

While that’s not a huge surprise given the smartphone market is widely wobbly at present, it is clearly benefiting the Big Tech firms who are manufacturing there. Both Apple and Samsung have been able to meet the targets set under the scheme.

Apple is also thought to be behind a push to persuade India to change its labor laws in order to permit 12-hour twice daily work shifts.

In other recent news from India:

Apple wants new working laws in India.
Apple isabout to open its first retail stores in India.
Foxconn plans tobegin AirPods production in India.
New Indiasmartphone security proposals may cause problems for Apple.
India’schanged labour laws for Foxconn in one region.
Apple has decided to change its global sales structure, elevating Ashish Chowdhary to lead Apple’s teams in India.
Apple VP Lisa Jackson gave an extraordinarily insightful interviewin which the company promised to make big investments in carbon neutral supply chain development in India.
Apple also announced it will work with NGO Frank Water to improve water managementin India and Bengaluru.
More recently, a senior executive of an Apple partner called Goertek made news when he suggested Apple is pushing really hard to get suppliers to set up manufacturing in India.
That same executive made headlines again a few days later when he suddenly resigned with immediate effect.
Apple supplier Foxconn announced a massive $700 million investment in building a new manufacturing facilityat about the same time.
That’s raising some friction in China, where Foxconn had to deny claims distributed on social media that the company is dismantling its existing production linesin China’s Shenzhen.