As expected, Apple assembler Pegatron has chosen Tamil Nadu (as opposed to Karnataka) to set up its manufacturing unit in India. Concomitantly, one of India’s most reputed corporate houses, the Tatas, through Tata Electronics will manufacture iPhone components from a production plant in Tamil Nadu as well.
Pegatron is chipping in with Rs 11,000 crore for its plant to come up near Chennai while the Tatas will invest close to Rs 8000 crore for its unit at Hosur Industrial Complex near the city of Krishnagiri.
According to a news report in the Times of India, the state government is expected to formalize agreements with the two companies around Pongal time (a local festival that falls on January 14) to facilitate establishing units to manufacture Apple products.
Tamil Nadu is already home to top 16 electronics manufacturers, including Nokia, Samsung, Flex, Dell, Motorola, Salcomp, HP, and Foxconn. Itis now aiming to contribute 25% of India’s total electronic exports to the world by 2025.
Apple has two other contract manufacturers — Foxconn and Wistron — in India.
Foxconn is already manufacturing handsets, including the iPhone 11 and iPhone 12, for Apple at its facility in Sriperumbudur, outside Chennai.
Wistron has two units in Karnataka, one of which is shut temporarily following workers trouble in December last.
Pegatron unit at Mahindra World City near Chennai
Pegatron has already registered a company in Chennai as a subsidiary. Construction work on Pegatron’s plant at Mahindra World City near Chennai is underway and is expected to be completed in a month or two.
Pegatron is Apple’s second-largest contract manufacturer and is said to have committed to an investment close to Rs 11,00 crore over the next five years in India.
Pegatron is also said to be looking for another plot of land in Tamil Nadu or Andhra Pradesh to set up its second Indian factory.
If construction wraps up on schedule, Pegatron can begin commercial production in June 2021 at the earliest.
Tata Electronics’ big plant will manufacture smartphone components
The Tata Group is investing in a big way for its massive electronic ecosystem which is expected to manufacture platforms for smartphones, including those of Apple, among other components.
Tata Electronics has been allotted 500 acres by TIDCO (Tamil Nadu Industrial Development Corporation).
Both Pegatron and the Tatas are taking advantage of the productivity-linked incentive (PLI) scheme that the India government has announced to deepen India’s electronics manufacturing base including achieving self-sufficiency in manufacturing of mobile handsets.
Tata Electronics will use the expertise of its group companies Titan Co’s precision engineering division and Titan Engineering and Automation to strengthen this project. The new unit will have a staff strength of 18,000 by October 2021 and 90 per cent of it will be women.