Pegatron follows Foxconn to manufacture iPhone 14 in India

Pegatron follows Foxconn to manufacture iPhone 14 in India

Pegatron Corp has become Apple’s second supplier in India to begin assembling the latest iPhone 14 model, which is being used to service domestic demand as well as for exports, people familiar with the details said. They added that the Taiwanese contract manufacturer plans to invest Rs 1,132 crore between FY 2022-23 and FY 2024-25 under the Production Linked Incentive (PLI) scheme for smartphones.

Another Apple supplier, Foxconn, began making the iPhone 14 in India in September within 10 days of its global launch, underlining the major US smartphone company’s attempt to expand manufacturing of its latest devices in what is emerging as a major production base.

All three of Apple’s contract manufacturers – Foxconn, Pegatron and Wistron – are in an expansion mode in India as the US giant looks to diversify manufacturing and reduce dependence on China. Incidentally, Foxconn’s factory in Zhengzhou, China, which is the largest iPhone facility in the world, has been under Covid-19 shutdown for the past few days.

Late check-in for a Taiwanese seller

Following the development, Apple analyst Ming Chi Kuo, in a tweet on Friday, said Foxconn would accelerate capacity expansion at its plant in India. “As a result, Foxconn’s iPhones in India will grow at least 150% annually in 2023, and the medium/long-term goal is to ship 40-45% of iPhones from India (versus currently 2-4%), Koo said.

Pegatron was the last supplier of Apple to enter the Indian market and it started making iPhones in April of this year with the iPhone 12.

As per details available with ET, the company plans to invest Rs 1,132 crore between FY 2022-23 and FY2024-25 under the Production Linked Incentive (PLI) scheme for smartphones. You’ll only be participating for four years since the company came in a year late.

Other Apple suppliers – Foxconn and Wistron – will receive incentives for five years.

As per the guidelines for the smartphone PLI scheme, global companies are required to make a minimum cumulative investment of Rs 1,000 crore over four years. Companies are not required to commit to investing in the last year of the five-year plan. Since Pegatron only takes incentives for four years, I’ve committed to investing in the first three years.

As per the programme, global companies are required to make an additional investment of minimum Rs 250 crore in the first year over the base year.

In four years, Pegatron plans to produce iPhones worth Rs.94,349 crore, of which Rs.77,293 crore will be exported. The company expected to create job opportunities for 28,733 people. Pegatron has a manufacturing unit in Chengalpet, Tamil Nadu.

Inquiries sent to Pegatron remained unanswered at the time of going to the printing press. Apple has not made any comments.

So far, none of Apple’s suppliers are making Pro models in India, which are imported.

The smartphone PLI scheme launched in 2020 was aimed at keeping manufacturers away from dominant geographies such as China and Vietnam. With the support of this scheme, India is trying to catch up with the two countries that still lead the world in mobile phone exports. India aims to export mobile phones to the value of $60 billion by 2025-26.

In fact, monthly mobile phone exports from India touched the $1 billion mark (more than Rs 8,200 crore) for the first time ever in September, led by Apple and Samsung.

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