Tata Group is on the verge of acquiring Wistron Corp’s Karnataka factory, a facility that assembles iPhone 14. Should the acquisition be successful, Tata will become the first Indian company to produce iPhones, not just for the domestic market but also for global distribution. The deal, which is expected to be finalized by August, is a part of India’s drive to establish itself as a leading player in hardware manufacturing, a vision championed by Prime Minister Narendra Modi’s made-in-India initiative.

India’s Drive to Become a Global Hardware Manufacturer

The Karnataka factory, currently valued at $600 million, has a workforce of over 10,000 employees. As part of an existing contract, Wistron is committed to delivering iPhones worth $1.8 billion in the current fiscal year through March 2024. The plan also includes expanding the workforce threefold in the next year. Tata Group has reportedly agreed to honor these commitments.

The acquisition is significant in the context of shifting global manufacturing dynamics, as many tech firms are seeking alternatives to China for their high-end device assembly. Apple, in particular, is turning its attention to India as a new production hub. The move aligns with India’s aggressive tax incentives to promote the domestic manufacture of electronics, including smartphones.

Moreover, India has attracted other major smartphone manufacturers such as Samsung, Xiaomi, and Vivo, to establish local production facilities. Smartphone exports from India, which include iPhone exports, have reportedly increased by 128% in April and May of this year. Despite Vedanta’s failed joint venture with Foxconn for a semiconductor project, India’s ambition to bolster its domestic electronics industry remains strong, with Tata’s imminent acquisition playing a vital role.

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(Source)

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Tata Group, the Indian multinational conglomerate, is reportedly in the final stages of acquiring Wistron’s iPhone manufacturing facility in India. The deal, worth over Rs 5,000 crores, is expected to be completed by the end of April. The facility, located in Karnataka, currently produces iPhone 14 and 12 models and is equipped with eight assembly lines.

Following the acquisition, Tata Group plans to begin assembling the iPhone 15 later this year. The move could see India become a key manufacturing hub for Apple products, as three Taiwanese firms – Wistron, Pegatron, and Foxconn – currently assemble Apple products in India. While Wistron is leaving the country’s iPhone business, Foxconn and Pegatron have recently expanded their production operations.

Tata Group’s interest in Apple manufacturing comes as the Indian government actively pushes for the country to become a production hub, and Apple seeks to move out of China. Industry experts suggest that the acquisition could prove lucrative for Tata Group, with speculations that the company may move on to acquire Pegatron’s iPhone manufacturing facilities once the Wistron deal is finalized.

However, the acquisition may also result in job losses, as sources indicate that around 2,000 factory workers may need to depart. Additionally, a reduction of 400 mid-level executives and the departure of 4-5 senior executives are also on the cards. Despite this, Tata Group has reportedly begun organizational changes at the facility in preparation for the acquisition.

The move highlights the growing trend of multinational conglomerates expanding their presence in the tech industry, with Tata Group joining the ranks of Apple’s current manufacturing partners. As the tech industry continues to grow and evolve, the acquisition could have significant implications for both Apple and the Indian manufacturing sector.

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Tata Group is apparently planning on buying a manufacturing facility from one of Apple’s suppliers. The company aims to acquire the iPhone manufacturing plant of Wistron that is set up in India. So here are all the details.

The Indian conglomerate is reportedly in talks with the Taiwanese supplier to buy out the iPhone production facility that is situated in the region, as per sources close to the matter (Via Economic Times). The company was previously rumored to be eyeing the iPhone production site earlier this year, and now it seems like the plan has seemingly moved forward. We had also reported that Tata Group may soon build iPhones for Apple in India. Tata was in discussions with Wistron to enter into a partnership to setup a joint electronics manufacturing venture in India.

This collaboration would primarily revolve around the production of iPhones in the country. The company is supposedly planning on working with Wistron to get access to its expertise in product development, supply chain, and assembly. For those unaware, Apple has been working on diversifying its supply chain outside of China and has been expanding it to regions like India and Vietnam. So this joint venture would’ve had Wistron’s iPhone assembling output to rise by over five times in India.

Interestingly enough, Tata has already entered the smartphone supply chain for Apple iPhones. It is currently building iPhone chassis components in the Southern part of India. Apart from Wistron, another Apple supplier called Pegatron and Foxconn assemble iPhone models in India, with the former recently deciding on building the company’s latest iPhone 14 series in the region.

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Apple has just recently announced its 2022 lineup of iPhones, which is the iPhone 14 series. It is the latest generation of flagship smartphones from the brand, and it appears that its supply partner in India might include the Tata Group.

According to a Bloomberg report, the Cupertino based giant’s Taiwabnese supplier Wistron Corp and Tata Group are in talks to create a joint venture that will them produce iPhones. In other words, Tata could be the first Indian company to make iPhones within the region. For those unaware, the Indian conglomerate is known for a number of business, which extends from salt to steel to even software as well. Now, it appears its diversifying its operations to another industry.

The sources close to the matter in the report further added that “The aim is to make Tata a force in technology manufacturing, and the Indian salt to software conglomerate wants to tap the Taiwanese company’s expertise in product development, supply chain and assembly.” Unfortunately, the joint venture’s deal structure and other finer details like shareholdings is still known at the moment. Although, it may likely involve the Indian company buying shares in Wistron’s Indian operations.

It is also possible that Tata was brought on board to also build a new assembly facility in India. Apple has been making iPhones in the region since 2017, so it wouldn’t be surprising if it plans on expanding the scale of production as it has already been attempting to diversify its supply chain to regions outside of China.

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In a survey on worldwide PC shipments, Counterpoint, a global research firm, predicted a loss of 11.1 percent YoY to 71.2 million units in Q2 2022, the worst YoY drop since Q2 2013. Lenovo continued to dominate the worldwide PC market in Q2 2022 with a 24.4 percent share. Recall that for Q2 2022, IDC stated a YoY fall of 15.3 percent.

The research company claims that lockdowns in Shanghai and Kunshan, which disrupted the supply chain for laptops and had an impact on significant laptop ODMs including Quanta, Compal, and Wistron, were mostly responsible for the decline. Important ODMs had YoY declines of 40% and 20% in April and May, respectively.

The manufacturing lines, according to Counterpoint, appear to have resumed regular operations and cleared order backlogs by mid-May. Additionally, a drop in demand and consumer spending has been attributed to regional wars and global inflation.

Q2, 2022 sales report:

Lenovo’s overall shipments decreased 12.7% year over year to 17.4 million units, mostly as a result of weak consumer demand, which was partly offset by modest commercial orders. HP was the worst hit among the leading brands in Q2 2022, with a YoY decline in shipments of 27%. Due to a product strategy that prioritizes business and premium customers, Dell’s YoY decline was only 5%.

Acer saw a 14.8 percent YoY shipment loss in Q2 2021 from a very high base, while Asus experienced a 7.7 percent YoY shipment decline as a result of its recent commercial market concentration. Apple’s Q2 shipments decreased by 20% year over year, mostly as a result of supply chain issues at Quanta’s Chinese manufacturing facilities.

As OEM stocks continue to build in the face of weak consumer demand, Counterpoint believes that these supply difficulties will be rectified in the second half of the year. Therefore, a little recovery could be expected, but the shipping reduction might persist.

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Back in December 2020, Apple supplier Wistron was placed on probation by the iPhone maker, after violence had struck its facility in India. Now, Wistron has resumed the production of iPhones in the same factory.

Last year, Wistron’s facility in India was struck by violence, with certain members of staff went on a rampage inside the site. The group destroyed factory equipments and more during the violent incident. While the supplier had initially claimed that an unrelated and unidentified outside group had been responsible for the events, local media found that many of the workers of the site were involved in the violence. These workers even claimed that Wistron had not paid them fully for four months and were even forcing extra shifts on them as well.

Since then, Apple put Wistron on probation while conducting an audit and found that the supplier had failed to implement a proper working hour management process. This led to “payment delays for some workers in October and November,” as per a MacRumors report. For those unaware, the plant was set up in the region to hire over 20,000 workers and was responsible for manufacturing the iPhone SE model.

However, its operations were put on hold by Apple until Wistron addressed the treatment of the workers. Furthermore, the new report also added that the supplier even cooperated with independent auditors along with the iPhone manufacturing team to resume production after readying the necessary systems and equipment. Notably, Apple announced last month that the workers would receive a new training program as well, to ensure they are educated over their rights and how to raise any concerns.

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Apple has been hitting headlines in India lately but not for good reasons. Its supplier Wistron’s facility near Bengaluru, India, recently got attacked by workers demanding unpaid wages. Now, as Reuters says the company has put Wistron on notice.

According to the report, an early audit by Apple reveals that Wistron has violated the “Supplier Code of Conduct”. Apparently, it didn’t manage the working hours properly and this led to delay in payment wages. Precisely, as Wistron admits it didn’t pay some workers during October and November on time. In case you don’t know, Wistron assembles Apple’s iPhones like iPhone 7 and iPhone SE 2020.

The report says that Wistron planned to expand operations by hiring 20,000 workers in a year. However, it couldn’t cope up with the scale of manpower, violated several laws which led to the outrage. Also, the inspection result by Karnataka Govt reveals Wistron had 5,500 workers more than the allowed number.

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Some of the other violations include improper HR management, underpayment of wages for contract workers, housekeeping staff. The company has also made female staff work overtime without proper authorization.

As a result of this, the report says Wistron will face delays in production due to Apple’s probationary action. This will take dent over its earlier ₹13 billion($177 million) commitment for the next five years to leverage the PLI scheme. If you recall, the Indian Govt recently approved cash incentives of 4-6% of the Sale of goods locally made in next 5yrs from 2019-2020.

That said, Apple says it will continue to monitor how Wistron manages to mitigate the violent attack which made it lose millions of dollars of property, Gears, and iPhones. Apart from Wistron, Apple’s other suppliers Foxconn, Pegatron are also expanding production in Vietnam, India.

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Apple said that it will be investigating its Taiwanese contractor, Wistron, after a recent violent event that took place in its facility in India. The event occurred in an iPhone manufacturing plant in the Indian city of Bengaluru.

For those unaware, Wistron is one of the primary suppliers of the Cupertino based giant. It has been making the iPhone 7 model for the Indian market alongside the second generation of the iPhone SE as well. According to a Reuters report, a group of unidentified factory workers trashed the facility on the outskirts of Bengaluru over the weekend. The violent episode arrives after the employees demanded unpaid wages and better working hours, as per a local trade union representative.

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Furthermore, videos made by the employees have surfaced showcasing men breaking security cameras, windows, and other equipments with rods and sticks. At the moment, the police have arrested 149 people over the violence, according to a police officer. Notably, Apple has stated that it has dispatched additional staff and auditors to the facility. The company stated that, “Our teams are in close touch with the local authorities and we’re offering our full support to their investigation.”

Apple demands that its suppliers provide safe working conditions, and treat its workers with dignity and respect, act fairly and ethically, and use environmentally responsible practices” when they are making their products or are performing any services for the company. Wistron has stated that it was “deeply shocked” by the events and blamed it on “unknown persons … with unclear intentions.” It further added that “The company always abides by the law, and fully supports and is cooperating with relevant authorities and police investigations.”

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Apple iPhone makers are said to be one among the companies that are expected to win approval to participate in a 6.6 billion US Dollars program that aims on bringing manufacturing to India.

For those unaware, the Indian government recently announced that it is expecting to approve a plan that aims at bringing 150 billion US Dollars worth of smartphone production into the country over the course of the next five years. According to a Bloomberg report, sources close to the matter said that known iPhone assemblers like Foxconn, Wistron, and Pegatron have already been cleared by the government committee for the program.

These three companies essentially produce almost every iPhone old in the world, with a majority of their assembly lines being located in China. Now, with the added incentive of the PLI (Production Linked Incentive) program, the government is trying to offer manufacturing incentives to some of the world’s largest smartphone brands to make their products in India and export to the world.

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Apart from the iPhone assemblers, Samsung is the only other applicant for the five slots allotted to foreign companies. Notably, popular Chinese brands like Oppo and Vivo are clearly missing from the list, which might be indicative of the rising trend of countries reducing dependence on China. Hari Om Rai, chairman and founder of Lava (an Indian OEM) stated that “It’s a thoughtful move by the government aimed at wooing Apple to bring significant iPhone manufacturing to India because, when the iPhone maker shifts, an entire ecosystem follows.”

At the moment, Chinese brands have been the most dominant companies in the Indian smartphone market. An analyst said that “Chinese brands have driven out domestic phone companies, leaving them with a mere 2% market share.” So the move also aims to strengthen local brands while also bringing in incentives for other international players to help boost the economy as well.

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Wistron is one of the three iPhone producers for Apple apart from Foxconn and Pegatron. All of them are Taiwanese contract manufacturers. But not anymore, as Luxshare, a Chinese company has officially announced to acquire two subsidiaries of Wistron in Eastern China for 3.3 billion yuan ($472 million).

Luxshare is known for producing accessories, cables, chargers, antennas, and other similar products. Above all, it is also the world’s largest Apple AirPods manufacturer. With the new acquisition, it will also become an iPhone assembler posing a threat to Pegatron’s business in China as per GF Securities analyst Jeff Pu.

According to a Wistron representative, the Kunshan site that is being sold to Luxshare makes smartphones, notebooks and connected devices. Some of these products are expected to be manufactured somewhere else. However, the spokesperson declined to comment on the company’s iPhone business.

Though Wistron is expected to not manufacture iPhones anymore in China, it will continue to assemble cheaper Apple smartphones in India. 

The Luxshare-Wistron deal is said to be finalized by the end of 2020 pending regulatory approval. The acquisition is a win for both Luxshare and Apple as the former can now try its luck in manufacturing iPhones, whereas the latter gets a Chinese partner to expand its local sources.

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(Source)

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Apple, the smartphone manufacturing giant, had previously started the production of its popular iPhone series in India. It achieved this alongside its known suppliers. Now, Wistron, one of its known suppliers, is bumping up the production capacity of iPhones in India.

Wistron plans on raising the production capacity by running its third and latest manufacturing plant in full capacity. The trial production of the facility started in November 2019 and has been constructed in haste thanks to collaborative efforts with local teams, according to Simon Lin (Chairman of Wistron). The company will also be hiring mid to top level management for the plant from the locals as well.

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Currently, Wistron has two plants established in India, which includes its Bengaluru plant that has been producing Apple’s iPhone SE and iPhone 6s models for the Indian market. the newest and third plant that has been set up in India is situated in Naraspura and will also undertake the production of iPhones in India. This is expected to boost the total production capacity of Wistron by a significant margin in the Southeast Asian country which is also the second largest smartphone market in the world, after China.

Furthermore, Apple is also expanding the production of more smartphones in the iPhone lineup for the Indian production facilities with another notable supplier called Foxconn Electronics. It has already been supplying iPhone XR devices in India and is expected to include higher end models and the newer models as well.

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(Via)

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Historically, Apple has primarily relied on Chinese manufacturers and their home facilities for the mass production of their iPhone lineups. However, in recent times the American company has been taking planned downsizing steps in the region whilst investing its production in other countries such as India and Vietnam. Now, Apple is starting to export from India after Foxconn started the production of the iPhone XR.

According to a report, Apple will see an export doubling its value to $3.2 billion this fiscal year. The Cupertino-based company is set to increase its manufacturing and financial commitment within the Indian subcontinent. Ravi Shankar Prasad, IT and Electronics Minister, met Foxconn officials that stated that the iPhone XR model is now being made in the Chennai (Tami Nadu) factory in South India. Initially, Apple had first invested in Indian production and manufacturing via Wistron. It is another Taiwanese maker similar to Foxconn but is based in Bangalore, Karnataka.

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Foxconn Group Chairman, Terry Gou, stated that the company is looking at the beginning of mass production of iPhones in India. This is in line with the Indian Government’s interests as the country wishes to be a preferred manufacturing destination for electronics based companies. India is known to levy import duties and tariffs on foreign imports. However, the country also helps incentivize foreign manufacturers to set up production within India. Notable examples include major brands such as Xiaomi, Samsung, Oppo, Vivo, and LG.

Local manufacturing also ensures that Apple can avoid the 20% duty that the Indian Government has mandated for imported devices. Thus, the American tech giant is hopeful of pricing its handset offerings more aggressively within the second-largest smartphone market in the world after China.

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(Via)

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