Foxconn is a massive electronics manufacturer that produces products for many companies, including Apple. In fact, they’re responsible for producing 70% of all iPhones in the world! It looks like the relationship between Foxconn and Apple will continue to grow, as Foxconn has signed an agreement to produce AirPods for Apple. To accommodate this, the company will be building a brand new $200 million factory in India. Here are the details…

Apple supplier Foxconn wins AirPod order, plans $200 million factory in India

Foxconn has signed an agreement to manufacture Apple’s AirPods and is set to build a $200 million factory in India. This deal marks Foxconn’s debut in AirPods production, reflecting the company’s push to diversify beyond China, where AirPods are currently made by various suppliers. As we mention above, the company is responsible for assembling around 70% of all iPhones.

Apple and Foxconn logo

The company intends to invest over $200 million in the new Indian AirPods plant, located in the southern state of Telangana. The total value of the AirPods order has not been revealed. However, considering that even the factory costs $200 million, we can say that it is a pretty big deal. Sources say Foxconn officials weighed the pros and cons of producing AirPods, given their lower profit margins. Ultimately, they chose to pursue the deal to strengthen ties with Apple and secure future orders for new products.

Apple reportedly requested the shift to Indian production. Foxconn competes with other Taiwanese firms, like Wistron Corp and Pegatron Corp, to win orders from the tech giant. Foxconn’s subsidiary, Foxconn Interconnect Technology Ltd, plans to start building the manufacturing facility in Telangana later this year, with production commencing by the end of 2024.

AirPod

Following the news, shares in the Foxconn unit jumped nearly 9%, while Foxconn shares rose by 0.5%. A second source confirmed that the Foxconn subsidiary will produce AirPods in India, but no additional details were given. Analysts have mentioned Apple’s desire for suppliers, including Foxconn, to manufacture AirPods in India, but investment size, timeline, and supplier details have not been specified.

Neither Foxconn nor Apple have commented on the matter

Apple and its primary suppliers have been gradually moving production away from China to circumvent potential disruptions from COVID-19 restrictions and escalating Sino-U.S. trade tensions. Foxconn announced plans to ramp up investment outside China to meet customer demand and reduce reliance on Chinese production.

It is unclear how Foxconn’s production plans will affect current AirPod suppliers like Luxshare Precision Industry, which has not commented on the matter. In November, Goertek Inc revealed that an overseas client suspended assembly work for a smart acoustic product, identified by analysts as AirPods Pro 2, resulting in a revenue loss of up to 3.3 billion yuan ($480 million).

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