Tata Strengthens Position as Apple Supplier with Pegatron Deal for Tamil Nadu iPhone Plant

• Chinmay
• November 18, 2024
• News
• Apple, Competition Commission of India, Foxconn, India electronics, IoT manufacturing, iPhone manufacturing, Pegatron, supply chain diversification, Tamil Nadu, Tata Electronics
• 0 Comments

India’s Tata Electronics has taken a significant step toward becoming a key player in Apple’s supply chain by acquiring a majority stake in Pegatron’s iPhone manufacturing plant in Tamil Nadu. The move marks a milestone in Tata’s rapid expansion into the lucrative iPhone production market, solidifying India’s position as a growing hub for Apple manufacturing.

The joint venture, announced internally last week, positions Tata as the majority stakeholder with 60% ownership. Tata will oversee daily operations, while Taiwanese contract manufacturer Pegatron retains the remaining 40%, offering technical support. The deal reflects Apple’s ongoing strategy to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington.

Expansion Amid a Growing iPhone Ecosystem in India

The Pegatron plant in Chennai, which employs approximately 10,000 workers and produces 5 million iPhones annually, will become Tata’s third iPhone manufacturing facility in India. This acquisition builds on Tata’s existing iPhone production capabilities, including an assembly plant in Karnataka acquired from Wistron last year, and another under construction in Hosur, Tamil Nadu.

Tata’s aggressive push into iPhone manufacturing rivals Foxconn, the only other major Apple contract manufacturer operating in India. The new venture is expected to enhance Tata’s iPhone production footprint, while also contributing to India’s share of global iPhone shipments, which analysts predict will rise to 20-25% this year, up from 12-14% last year.

Approval Process and Future Prospects

The two companies plan to seek approval from the Competition Commission of India (CCI) in the coming days. Once cleared, this partnership is poised to further accelerate Apple’s shift toward India as a critical node in its global supply chain.

For Tata, the acquisition of Pegatron’s facility is a strategic step that aligns with the company’s ambitions to lead India’s electronics manufacturing sector. With Apple’s support, this collaboration also underscores India’s growing prominence as a manufacturing destination for high-value electronics.

Strategic Implications for India’s IoT and Electronics Sector

Tata’s foray into iPhone manufacturing resonates beyond Apple. It signifies a strengthening of India’s electronics ecosystem, paving the way for new opportunities in IoT device manufacturing and innovation. The integration of such high-tech production capabilities could also spur advancements in connected devices and smart technologies within the country.

This landmark deal not only reinforces Tata’s standing as a major Apple supplier but also highlights India’s role as a rising star in global electronics manufacturing.