American tech giant Apple’s second-largest contract manufacturer Pegatron is setting up a base in India, the world’s fastest-growing smartphone market.
The Taiwanese manufacturer has registered a corporate entity in the South Asian nation, which essentially means that it is looking to start manufacturing in the country. This would lead to increased production capacity for iPhones, at a time when Apple is reportedly looking to shift its manufacturing operations from China to India amid ongoing tension between the US and Asia’s largest economy.
A report by local media Economic Times (ET), citing government sources, said Pegatron has registered its India subsidiary in Chennai.
“Currently, the company’s officials are in discussions with multiple state governments to find land to set up factories after which they would import plant and machinery,” the report said quoting the official.
Headquartered in Taipei, Pegatron is the world’s second-largest contract manufacturer of electronics after fellow Taiwanese firm Foxconn Technology. It makes smartphones, notebooks, desktops, motherboards, tablet devices, game consoles, LCD TVs, among other things. Foxconn and Pegatron, along with Wistron, another Taiwanese manufacturer, are three of the largest iPhone makers. While Foxconn and Wistron have been present in India for the last several years, Pegatron has just set its eyes on India.
Read this: India to up its electronic manufacturing play, sets up USD 6.3 billion fund
In fact, Pegatron has been working to move production away from the company’s main plants in China to Indonesia and Vietnam by the end of this year, due to rising labor costs in China, and the US-China trade war. It seems India is now added to the list of countries where Pegatron will open up factories.
The move aligns with Apple’s strategy of diversifying its supply chain which is currently centered in China. And a big part of that, approximately 20%, is expected to land in India. In May, ET reported that Apple was looking to shift “nearly a fifth of its production capacity from China to India.” The Cupertino-headquartered company was aiming to drive up its local manufacturing revenues to around USD 40 billion over the next five years, the report said.
During the same time, Wistron was said to be looking to pump in USD 165 million in its new production facility in the outskirts of Bengaluru, popularly known as India’s Silicon Valley.
Just a month before that, it was reported that Foxconn would invest about USD 300 million to build manufacturing plants for Apple, with more investments planned. A report by Reuters said the company plans to invest up to USD 1 billion to expand a factory in southern India iPhones. The factories, media reports said, would be ready for Apple’s next iPhone launch in September.