Tata Group of India acquires a Taiwanese factory in India and will contract iPhone manufacturing

On the 27th local time, Rajiv Chandrasekar, Minister of State for Electronics and Information Technology of India, announced on social media platform "X" that Tata Group of India will take over the Indian business of important iPhone supplier Wistron Zitong, and Tata will start producing Apple phones for the domestic and global markets in India within two and a half years. The group will also become India's first local iPhone manufacturer.

Chandrasekar said, "Prime Minister Modi's visionary Production Linked Incentive (PLI) program has driven India to become a trusted major center for smartphone manufacturing and exports

Earlier that day, Wistron announced that its board of directors had approved the sale of its factory in Karnataka, India, to Tata for a tentative transaction price of $125 million. After both parties confirm and sign the relevant agreement, the transaction will seek regulatory approval.

According to public information, Weichuang's factory is located 50 kilometers east of Bangalore, the capital of Karnataka, in the Indian Silicon Valley, with an area of approximately 200000 square meters. There are 8 iPhone production lines in the factory, with over 10000 employees, including thousands of engineers, which is an important part of Apple's global industrial chain.

Weichuang was also the first company to produce iPhones in India, operating for over 15 years and producing models such as the iPhone SE for Apple.

As for the reason why Weichuang withdrew from India, previous reports on Quartz Network in the United States believed that Weichuang had encountered many controversial treatments in India.

On December 12, 2020, Wistron's India factory was smashed. Image self printing media

In 2020, its Bangalore factory faced large-scale protests from workers. The Indian government subsequently removed Wistron from the approved list of manufacturers, forcing Wistron to change its labor policy. Weichuang was also targeted by Indian authorities due to environmental issues. The Karnataka Pollution Control Commission in India cracked down on the company in 2019 for violating environmental laws. The company dumped untreated waste and polluted local groundwater.

In addition, the implementation of the Apple industry chain also needs to consider complex factors. Taiwan's "Zhongshi Electronic News" once analyzed that if the supply chain could not be concentrated around the production line, the cost of freight, tariff, time error and other costs would rise rapidly. Apple's production line has a fairly complete supply chain in Chinese Mainland, which is hard to reach in other regions.

Take the list of major suppliers announced by Apple in October 2022 as an example. Ninety nine suppliers provide 98% of the purchased materials, modules and parts for its production line, of which 150 set up factories in Chinese Mainland to supply Apple products, accounting for about 79%.

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