Apple supplier acquires land in India for factory

Production could begin in just a few months.

What you need to know

  • iPhone supplier Pegatron has acquired the rights to use land in India to build a factory.
  • The site will mainly be for the production of smartphones, employing 14,000 people.

Apple supplier Pegatron has spent $14 million on rights to land in Chennai, India, for a factory to be used mainly for iPhone production.

As reported by Digitimes:

Pegatron has disclosed it has spent INR1.028 billion (US$14.12 million) acquiring rights to use a plot of land for building a factory in Chennai, India.

Pegatron will set up a manufacturing base on the factory site mainly for production of iPhone smartphones, with production to begin the earliest in the second half of 2021, according to industry sources, adding Pegatron plans to employ about 14,000 workers there.

In preparation for production in India, Pegatron in November 2020 established a wholly-owned subsidiary, Pegatron Technology India, with initial paid-in capital of INR10.989 billion.

Pegatron is also investing in production in Vietnam, whilst other Apple suppliers including Foxconn and Wistron have already set up manufacturing bases in the country. Apple has onshored much of its iPhone production in the country, driven by generous government subsidies and incentives.

This week it has also been reported that India is seeking a similar deal with Apple and other vendors to bring tablet and computer production to the company, with Apple lobbying for more generous subsidies. From that report:

India is now lining up a similar scheme for the production of laptops and tablets:

Now the government is preparing to unveil another incentive to drive local manufacturing of IT products including tablets, laptops and servers, three sources closely involved in the drafting of the plan told Reuters.

The new performance-linked incentive (PLI) scheme, which offers cash-back to manufacturers for exports, will have a budget of up to 70 billion rupees ($964.5 million) over five years, the sources said. It’s expected to be launched by the end of February.

Apple is reportedly lobbying for something like $2.7 billion, a larger package of incentives. This is because India “doesn’t yet have the scale or the supply chain for making IT products” and is competing with duty-free imports.

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