Apple supplier Pegatron said it is in talks with Tata to sell its sole iPhone plant in India


Pegatron is in advanced talks to hand over control of its sole iPhone manufacturing facility in India to Tata Group, two sources with direct knowledge said, marking the latest scale of the Taiwanese firm's Apple partnership.

Under the deal, which has received Apple's backing, Tata plans to hold at least a 65 percent stake in a joint venture that will operate the Pegatron plant near the city of Chennai in the southern Indian state of Tamil Nadu, with the Taiwanese firm providing technical support. Will provide. Support and hold the rest,” said one of the sources.

Tata, one of the largest conglomerates in India, will operate the joint venture through its Tata Electronics unit, the second source said.

The Pegatron India factory has about 10,000 employees and produces 5 million iPhones annually. This is the last such facility operated by the company after it seized control of the iPhone plant in China to rival Luxshare in a $290 million (roughly Rs. 2,415 crore) deal last year.

Tata and Pegatron did not respond to emailed requests for comments. Apple declined to comment. The sources did not share financial details of the ongoing talks.

Apple is looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington. For India's Tata, the Chennai Pegatron plant will give a boost to its iPhone manufacturing plans.

Tata already operates an iPhone assembly plant in the neighboring southern state of Karnataka, which it took over from Taiwan's Wistron last year, and is also building another in Hosur, Tamil Nadu, with Pegatron as its joint venture partner. Is likely to emerge.

Pegatron has been building another iPhone factory at its Chennai campus for several months and the Tata deal talks include taking over that facility as well, the first source said.

Talks between Tata and Pegatron for the factory are expected to close in six months and all Pegatron India employees will move to the joint venture unit, the first source said.

Apple's iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is important for Apple's growing ambitions in India, with analysts estimating it to contribute 20-25 percent of total iPhone shipments this year, up from 12-14 percent last year.

The reasons for Pegatron's gradual exit from its Apple business, including India, are not known. Last year, Pegatron said the China plant deal was to raise capital to “optimize its business.”

© Thomson Reuters 2024

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