Apple supplier Foxconn expands India iPhone production, further diversifying supply chain away from mainland China
- Foxconn is adding iPhone production capacity to an existing factory near Chennai, according to a local report
- The electronics manufacturer has been seeking to diversify its supply chain away from mainland China amid Covid-19 disruptions and geopolitical tensions
Taiwan-based Foxconn, the world’s biggest electronics contract manufacturer, will soon start phone production in a new building at an existing factory near Chennai, capital of the southern Indian state of Tamil Nadu, according to local media The Economic Times, citing unnamed sources.
The move follows the company’s hiring spree in the country in recent weeks, the report said.
Foxconn did not immediately respond to a request for comment.
Foxconn shares rose 1.2 per cent in Shanghai to 9.5 yuan (US$1.40) and 1.5 per cent in Taipei to TW$48.70 (US$1.60) on Friday morning. Its Hong Kong-listed unit, FIH Mobile, dropped nearly 1 per cent to HK$1.03 (13 US cents).
In recent years, Apple and Foxconn have stepped up efforts to expand their supply chains outside mainland China, especially in India and Vietnam, which incentivise local production. Supply chains have faced a turbulent couple years amid disruptions from the Covid-19 pandemic and geopolitical conflicts.
Foxconn has established more than 40 industrial parks in mainland China, according to its website, more than in any other country. But frequent anti-pandemic lockdowns and other disasters have slowed down production. Amid small outbreaks in Shenzhen this year, company compounds in the city were twice forced to work under a “closed loop”, a policy in China that requires employees to live and work on company premises for factories to stay open.
Foxconn has been seeking to build up its presence in India for years. In 2015, the company said it would build 12 factories in the country, employing nearly 1 million workers. It currently has just the one plant close to Chennai, sometimes known as the “Detroit of Asia” because of its industrial base.
Late last year, the plant was temporarily closed after worker protests over food safety. The production lines reopened in January.
Also last year, Vietnam approved a plan for Foxconn to build a US$270 million plant that would produce laptops and tablets. The company said it had invested US$1.5 billion in the country by the end of 2020 and would invest another US$700 million in 2021. The company said last year that it aims to reach US$40 billion in revenue in the Southeast Asian nation within three to five years.