Tata Electronics acquires majority stake in Pegatron's Tamil Nadu iPhone plant, boosting India's role in Apple's global supply chain.
Tata Electronics is preparing to turn the tables in iPhone manufacturing soon. The company has officially taken control of Pegatron’s iPhone manufacturing plant in Tamil Nadu with a majority stake. This is a major jump for Tata as it seeks to cement its position of being among top suppliers for Apple. The deal also underscores India’s expanding role as a component supplier to Apple.
Tata will exercise 60 per cent control in the new joint venture while its Indonesian partner, Pegatron, will control the rest. The deal also include that Tata will be responsible for the management of the plant on regular basis. Pegatron, for the other hand, will offer important technical support that is so vital to facilitate the operations of the facility. , though there are no publicly-disclosed details of the financial implications of the deal, informal sources have gone on record]] to state that all the legal processes pertaining to the deal have been closed.
This isn’t the first dance for Tata in Apple’s ecosystem either Tecno mobiles are proud part of Tatas personal computer business. In the previous year, it bought Wistron’s iPhone manufacturing line in Karnataka. With the Pegatron deal now signed, Tata is pushing its presence out even more, and indeed out of Asia. The factory in Tamil Nadu provides work to about 10,000 employees and has the potential of manufacturing five million iPhones every year. Efforts have been made already to expand those operations. Tata hopes to employ 20,000 new workers for the new iPhone assembly plant in Hosur, Tamil Nadu.
This venture nicely complements Apple’s plan to expand its manufacturing beyond China. In the last three years, Apple has moved up to 12 to 14 percent of iPhone production from the rest of the world to India. This shift is mainly led by the recently launched Indian government’s Production Linked Incentive (PLI) scheme that aims at promoting domestic manufacturing. Still, China is Apple’s largest production center as it contributes production of over 85% of the iPhones throughout the world.
Tamil Nadu facility is one among the strategic weapons of Pegatron. The iPhone plant became the firm’s sole production center for iPhones after it let go of a Chinese factory, selling it to Luxshare for $290 million in 2020. This way Pegatron makes sure it still has its share in the supply chain business with Apple while getting to leverage on Tata local resources.
This co-operation is not about figures only; it is about India increasing becoming as the centre more global manufacturing of technology. India is, at present, the second largest market for smartphones globally, and Apple very keen on the market. Curiously, it has been found that almost 68 percent of all the iPhones assembled in India are exported to destinations such as the USA, indicating the quality of manufacture prevailing here.
The chairman of Tata Group, N. Chandrasekaran, has expressed the desire of the company in the technology electronics manufacturing field. Recently in a programme in Tamil Nadu he expressed about his future intentions of increasing the local manufacturing and employment opportunities. Hosur plant, which is planned to be a large production centre, reflects these goals.
In this ever-evolving dynamic we can only anticipate that as Apple increases its focus in India, the role of Tata will only intensify. Thus, the cooperation with Pegatron is just one of the steps where the Tata Group is gradually moving to the utilization of the position of the leader of the electronics manufacturing industry in India. It also opens up future possibilities for Tata and it also sets out the role that India could play in the future for technology regarding innovation.
Pegatron deal is largely the victory of Tata and the Indian extension of Apple. Once the plant is established, the company is likely to become one of the many factories that are steadily helping India to become an identified hub for tech production.
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