Foxconn is Considering an investment of US$1 Billion to Expand their current iPhone Plant in India to support Apple's Gradual Shift from China
Late last month Patently Apple posted a report titled "Apple's iPhone maker Foxconn is going to Expand Production in India with a Specific Plan to be made public in the coming months, according to Foxconn Chairman Liu Young-way. No details were made public at that time. In a scramble to get ahead of Foxconn's news of their investment, a new report by Reuters today is claiming that Foxconn is planing to invest up to US$1 billion to expand their existing iPhone factory in southern India.
The move, the scale of which has not previously been reported, is part of a quiet and gradual production shift by Apple away from China as it navigates disruptions from a trade war between Beijing and Washington and the coronavirus crisis.
One of the sources with direct knowledge of the matter told Reuters that "There’s a strong request from Apple to its clients to move part of their iPhone production out of China."
Foxconn’s planned investment in the Sriperumbur plant, where Apple’s iPhone XR is made, will take place over the course of three years," a second source reveals.
Reuters further reports that "Some of Apple’s other iPhones models, made by Foxconn in China, will be made at the expanded plant," said both sources, who declined to be identified as the talks are private and details have yet to be finalized.
Taipei-headquartered Foxconn will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan, one of the sources said.
Counterpoint researcher Neil Shah told Reuters: "With India’s labor cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub." Something the Indian government has dreamed of and worked on for years with little success. But signs are showing us that progress is slowing but consistently being made to open the floodgates in India.
On May 30, Patently Apple posted a report titled "The Indian Government has dropped Contentious Clauses in their new 'Production Linked Incentive' Program that could be Positive for Apple." The report noted that an Indian Official stated that "The irritants have been resolved." India is trying to attract American investment with pressure on US companies now to diversify manufacturing out of China under the ‘China plus one strategy.'"
The rumored information from Reuters today would seem to support what was reported on back in May. In fact, Reuters report added to May's information by noting that "India is also working to boost electronics manufacturing by firms such as Foxconn and last month launched a $6.65 billion plan, offering five global smartphone makers incentives to establish or expand domestic production."
All signs are now pointing to Apple being one of the five smartphone manufacturers that India is going all out to win over to make their economic cause a reality. For more details on this, read the full Reuters report.