(Commonwealth) _ Tata is reportedly eyeing the construction of a factory in Hosur, situated in the southern state of Tamil Nadu, according to individuals familiar with the matter. These sources, who chose to remain anonymous discussing unrevealed plans, suggest that the facility could house around 20 assembly lines and potentially employ 50,000 workers within a span of two years. The aim is to have the site operational within the next 12 to 18 months. The conceptualized establishment of this plant represents a strategic maneuver aimed at strengthening Apple’s initiative to localize its supply chain, establishing a more robust partnership with Tata. Particularly noteworthy is Tata’s existing ownership of an iPhone manufacturing facility, procured from Wistron Corp., located in the adjacent state of Karnataka. This move aligns with Apple’s deliberate strategy to broaden its operational scope beyond the confines of China, engaging in collaborative efforts with manufacturing allies across various global destinations such as India, Thailand, Malaysia, and beyond.
Apple’s deliberate diversification of its manufacturing bases away from China is part of a comprehensive strategy to decentralize its production network and reduce dependency on any single region. By forging alliances and expanding operations in multiple countries, Apple aims to mitigate risks, enhance flexibility, and capitalize on the diverse capabilities and resources offered by different regions. This approach aligns with broader industry trends of seeking diversified and resilient supply chains to navigate challenges and capitalize on opportunities in the global market landscape. While an Apple spokesperson declined to comment on the matter, there has been no response from Tata’s representative regarding the inquiry. Expanding its collaboration with Apple, the Indian conglomerate has taken significant strides to broaden its scope beyond its conventional businesses, ranging from salt to software. Tata has notably accelerated its hiring efforts at its existing Hosur facility, primarily focused on producing iPhone enclosures, also known as metal casings. Additionally, Tata has announced plans to roll out 100 retail stores dedicated to Apple products. Complementing these moves, Apple has initiated the opening of two stores in the country and has intentions to establish three more.
Prime Minister Narendra Modi’s production-linked subsidies have spurred key Apple suppliers like Taiwan’s Foxconn Technology Group and Pegatron Corp. to amplify their presence in India. This impetus has enabled Apple to assemble iPhones worth over $7 billion in India during the previous fiscal year, elevating the country’s share in iPhone production to approximately 7%. Notably, the bulk of these devices are still assembled in China, which historically dominated all iPhone manufacturing. The forthcoming plant is envisioned to occupy a mid-tier position among iPhone manufacturing facilities on a global scale. Projections suggest that its size and capacity will exceed that of Tata’s current Wistron-acquired facility, which presently accommodates a workforce exceeding 10,000 individuals. However, despite this expansion, the anticipated plant’s scale is anticipated to be more modest compared to the colossal manufacturing complexes operated by Foxconn in China, where employment figures soar into the hundreds of thousands. This positioning within the mid-tier realm signifies a notable expansion for Tata’s iPhone production capabilities while acknowledging the dominance and scale of Foxconn’s manufacturing prowess in China. While smaller in size compared to the mammoth operations in China, the projected new plant is poised to significantly bolster Apple’s manufacturing capabilities in India. This expansion serves as a testament to Apple’s commitment to diversifying its production network and tapping into varied global resources to meet market demands and mitigate risks associated with reliance on a singular manufacturing hub.
