Tata's iPhone Factory in India Shuts Indefinitely After Fire, Apple May Shift Orders Back to China

Tata's iPhone Factory in India Shuts Indefinitely After Fire, Apple May Shift Orders Back to China

Tata's iPhone Factory in India Shuts Indefinitely After Fire, Apple May Shift Orders Back to China

A fire broke out at Tata's iPhone factory in Tamil Nadu, India (formerly owned by Wistron), on September 28, 2024. The fire, which has now been extinguished, caused significant damage to the facility and has led to its indefinite closure. As the factory produces rear panels for iPhones for both Tata and Foxconn, the incident could have a major impact on Apple.

According to Reuters, the damaged factory produces rear panels for iPhone 14 and iPhone 15 models, with an estimated production gap of up to 15%. Counterpoint Research estimates that this could result in a total gap of 1.5 million units. This comes as a significant blow to Apple, especially as India is about to enter its peak festive season from October to early November.

Despite the setback, Apple may be able to minimize the impact of production losses with the help of its suppliers in China. A source, who wished to remain anonymous, pointed out that Apple typically keeps an eight-week inventory of rear panels, which will provide some buffer. Additionally, Apple can ask its Chinese suppliers to add shifts on existing production lines or even add new lines to compensate for the loss at the Tata facility.

While the cause of the fire at the Tata factory is currently unknown, the fire reportedly originated in an area where chemicals were being stored. Notably, this isn't the first fire incident at an iPhone factory in India. In September 2023, a Wistron facility producing iPhones was shut down for several days due to a fire, while an earlier fire in the same year led to a halt in Lightning cable production in India.

Although the incident could impact Apple, it also highlights the vulnerability of Apple's supply chain. In recent years, Apple has been making efforts to shift some production away from China to other countries like India to reduce its dependence on a single supplier. However, the incident suggests that even new production bases may face similar risks.

Moving forward, Apple needs to continue working towards ensuring the reliability and diversification of its supply chain. This includes investing in new production bases and taking steps to prevent accidents like fires. Apple also needs to be prepared to respond to sudden events and ensure that its production remains unaffected.