Apple's supply chain shuffle: Foxconn plans iPad production in India
Foxconn, the Taiwanese contract manufacturer, is reportedly planning a significant expansion of its operations in India. The company is considering assembling Apple's iPads at its facility in Tamil Nadu. Currently, Foxconn's primary focus in India is on iPhone assembly. This move signifies the company's growing confidence in India's rapidly developing supply chain capabilities for Apple products.
Foxconn in talks with Indian government, aims to double operations
According to the Economic Times, Foxconn has initiated discussions with the Indian government regarding its expansion plans. The company's experience in India has been positive and it aims to double its current operations over the next few years. This expansion will not only include iPhones but also iPads and other products. However, the assembly of Apple's Mac range of laptops and PCs may take longer due to their smaller production volume.
Assembling iPads in India aligns with Apple's diversification strategy
The decision to assemble iPads in India is in line with Apple's strategy of diversifying away from China. Last year, Apple shifted a portion of its iPad development to Vietnam. Industry experts note that the skills required to assemble an iPad are similar to those needed for iPhone assembly. A source told ET that an iPad is essentially a larger iPhone and can be assembled in India without much difficulty as Apple's contract manufacturers are already equipped for such tasks.
Foxconn to benefit from India's production-linked incentives
Foxconn is set to benefit from India's production-linked incentives (PLI 2.0 for IT Hardware), which includes tablets, as it aggressively increases its investments in the country. Boyce Fan, Vice President of Research at TrendForce, stated that expanding iPad production in India is primarily aimed at diversifying supply chain risks. He also noted that targeting the domestic market in India is a consideration and estimated annual iPad shipments will reach 49 million this year, marking a 4.5% increase from last year.
Foxconn's investment plans and manufacturing levels in India
In June, it was reported that Foxconn was planning to manufacture AI servers at its Sriperumbudur plant near Chennai. The company also announced plans to invest ₹1,200 crore in building a new factory on company-owned land in India. Additionally, Foxconn is constructing a mega factory outside Bengaluru, primarily for iPhone production. The ET reported that while iPhones have reached Completely Knocked Down (CKD) levels in India, iPads will likely start with Semi-Knocked Down (SKD) levels before reaching CKD.
