A new Foxconn plant in India looks set to be about half the size of the massive iPhone assembly facility in Zhengzhou, China – colloquially known as iPhone City.
Foxconn’s Zhengzhou plant employs around 200,000 people, and the new Indian facility is said to be creating around 100,000 jobs. It may also represent a key step in Apple building out an extended supply chain in India …
We’ve been warning for many years about both the need and the difficulty of reducing Apple’s dependence on China, but the pandemic made even clearer the risks of the company having most of its manufacturing eggs in one basket. COVID-19-related disruption at the world’s biggest iPhone assembly plant was estimated to have cost the company a billion dollars per week.
That’s seen Apple suppliers boost the scale of their production in other countries, including India, Vietnam, and Indonesia.
India is seen as Apple’s main hope when it comes to relocating production outside of China. A report last year suggested that a quarter of all iPhones could be made in India by 2025, and a later one indicated that this could rise to half of all iPhones by 2027.
New Foxconn plant in India
With China’s iPhone City estimated to assemble at least 80% of the world’s iPhone supply (and some estimates even higher), Foxconn and others will need to massively step up their Indian operations if they are to hit the kind of levels analysts are expecting.
A Bloomberg report today suggests that a major new Foxconn plant may be geared to just that.
Apple partner Foxconn Technology Group plans to invest about $700 million on a new plant in India to ramp up local production, people familiar with the matter said […]
The investment is one of Foxconn’s biggest single outlays to date in India and underscores how China’s at risk of losing its status as the world’s largest producer of consumer electronics […]
The new production site in India is expected to create about 100,000 jobs.
Bloomberg‘s sources likely include government officials, with India’s deputy tech minister Basavaraj S. Bommai tweeting about it.
Apple phones to be built in the state soon. Apart from creating about 100,000 jobs, it will create a whole lot of opportunities for Karnataka.
Points to supply chain build-out
Aside from the sheer scale of the investment, the other notable thing about the report is that it references iPhone parts, as well as assembly.
The Taiwanese company […] plans to build the plant to make iPhone parts on a 300-acre site close to the airport in Bengaluru
As we’ve described in the past, a key element of China’s role as Apple’s key manufacturing center is the mass of supply chain partners in the country. If India is to develop its role beyond a location for final assembly, that supply chain will need to be replicated locally, so making parts in India is a significant advance.
One cautionary note we would make is that estimates of job creation, by companies and governments alike, often turn out to be exaggerated – sometimes dramatically so!
They also tend to factor in jobs created further down the supply chain, so the actual scale of the plant may be somewhat smaller than this report suggests. However, in this case, supply chain jobs are every bit as important to loosening China’s stranglehold on iPhone production.
So whatever the small print may turn out to reveal, there is no question that this is a huge step on Apple’s journey to reducing its reliance on China.
Purely illustrative photo of large building: Piermanuele Sberni/Unsplash
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