Apple’s Contract Manufacturers and Component Suppliers in India

We discuss Apple’s strategy of diversifying away from its heavy reliance on Chinese manufacturing and list its contract manufacturers and local suppliers in India.

Apple exported close to US$6 billion in India-made iPhones from April to September 2024, marking a 33 percent increase from the same period last year. This growth aligns with Apple’s goal of reducing its dependence on China. The company is expected to surpass US$10 billion in exports by end of FY25. In the fiscal year ending March 2024, Apple assembled US$14 billion worth of iPhones in India, with the bulk of that amount designated for export, effectively doubling its production from the previous year.

Apple has been assembling smartphones in India through contract manufacturers since 2017. However, until 2022, the Cupertino-based US technology giant had primarily used India’s manufacturing facilities for assembling entry-level or legacy handsets. This changed in 2021-22 when Apple started assembling the iPhone 14 models in India.

Seven of Apple’s India suppliers are based in the southern state of Tamil Nadu, including Hon Hai Precision (Foxconn), Tata Electronics, and Flex; three are hosted in neighboring state Karnataka, namely Wistron, Aequs, and Shenzhen YUTO Packaging Technology. The states of Andhra Pradesh, Maharashtra, and Uttar Pradesh each host a supplier—Cheng Uei Precision, Jabil, and Sunwoda, respectively.

Surge in India iPhone exports

According to trade intelligence firm The Trade Vision LLC, Apple experienced a remarkable surge in iPhone exports from India, soaring from US$6.27 billion in the fiscal year 2022-23 to US$12.1 billion in 2023-24, marking nearly a 100 percent increase. Per a report in Business Today, Apple’s India operations reached a value of US$23.5 billion in FY24. This substantial growth highlights the increasingly significant role India plays in Apple’s global supply chain.

Even as it targets a bigger pie of the domestic market, Apple exports 70 percent of its India iPhone output, which is likely to increase in future.

The United States was the top importer of smartphones from India, with imports reaching around US$6 billion in FY 2023-24. Among these imports, Trade Vision noted that Apple iPhones accounted for US$5.46 billion, marking a notable rise from US$2.1 billion in FY 2022-23.

Expansion of India product manufacturing line

In a departure from tradition, Apple is undertaking its “New Production Introduction” (NPI) process for the 2025 standard iPhone 17 model at an Indian facility. This was previously exclusive to China due to its sophisticated supply chain infrastructure. The NPI stage is vital in Apple’s launch process, transforming prototype designs into mass-production-ready blueprints by refining manufacturing techniques and materials.

Sources speaking to Bloomberg say iPhone maker Foxconn is now assembling the iPhone 16 Pro and Pro Max models at its Sriperumbudur plant in Tamil Nadu. In September of the previous year, commercial production of the iPhone 15 had commenced at the plant—marking the first instance of an iPhone assembled in India being available for sale right from the launch stage. Apple’s other partners in India—Pegatron and Tata Group—will also assemble the smartphone devices.

According to Bloomberg, Apple suppliers manufactured iPhones worth US$14 billion in India during FY24, comprising 14 percent of the global total—that is, around one in seven iPhones worldwide. Apple’s production in India includes iPhone models 12, 13, 14, 15, and the entire 16 lineup. Foxconn accounts for the lion’s share of iPhones made in India.

Apple seeking to diversify supplier network in non-China markets

While Apple has been diversifying its operations away from China, it increased the number of suppliers in this market from 48 to 52 in 2023. Other major bases for Apple production and assembly are Vietnam (35 suppliers), Thailand (projected to rise to 24 in 2024), and India (15).

Further, Apple is actively seeking new suppliers from India, Japan, and South Korea to deliver essential components to its contracted manufacturers based in India.

According to a report in the Financial Times, Apple had previously indicated to its component suppliers that the firm wants to procure batteries for the upcoming iPhone 16 from Indian factories. Battery manufacturers, including Desay from China, received encouragement to set up new facilities in India. Simplo Technology, a Taiwanese battery supplier for Apple, has been urged to increase production in India to meet upcoming orders, according to three individuals familiar with the matter, per the FT report.

Last December, Apple had asked the Indian government to exempt its older models from needing to meet the universal charging point standard, stating that it could hamper local production targets tied into incentive schemes. India has been considering mandating a common charging port (Type C USB port) for electronics devices in 2025. The universal charging point was first proposed by the European Union and will be implemented by the end of 2024 leading Apple to switch to the USB-C port from its iPhone 15 series.

Apple scouting for more suppliers in India

India is the third-largest supplier for iPhones and ranks among the top three global buyers, according to The Trade Vision (TTV), a data intelligence firm. Apple, along with its suppliers, aims to produce more than 50 million iPhones annually in India over the next few years. The plan includes the production of tens of millions of additional units in the subsequent period.

The company is in talks with various suppliers in India’s automotive, aerospace, and consumer electronics sectors to explore potential supplier agreements spanning multiple product categories, according to reporting in the Livemint. Some suppliers are already investing in new capabilities, machinery, and equipment, positioning themselves as potential Apple suppliers pending a comprehensive cycle of certification and approvals, according to Mint’s findings.

Meanwhile, Foxconn and Tata Electronics have been scaling up manufacturing capacity and expanding supply chain presence. For example, Foxconn is expected to invest US$1 billion to establish a new plant assembling smartphone display modules. The company has reportedly secured 500,000 sq ft of land at an industrial park in Oragadam near Chennai. Foxconn is expected to mainly support the production of iPhones and will likely benefit other manufacturers Pegatron and Tata Electronics.

In April this year it was reported by Business Today that “Apple is in advanced discussions with Indian companies Murugappa Group and Tata group’s Titan Company for the assembly of iPhone camera modules”. Both Titan and Murugappa groups are established in high-precision manufacturing. In 2022, Murugappa Group acquired a majority stake in Moshine Electronics, a camera module maker based in Noida. Titan Company, on the other hand, owns Titan Engineering and Automation, serving clients globally in sectors like defense and aerospace.

Per a Reuters report dated April 8, 2024, Pegatron is in late stage discussions to transfer control of its sole iPhone manufacturing plant in India to the Tata Group, according to two sources familiar with the matter. Under the proposed agreement, which has Apple’s approval, Tata intends to retain a minimum 65 percent ownership in a joint venture responsible for operating the Pegatron facility near Chennai in Tamil Nadu. An April 21 report in the Times of India stated that the deal would include a second plant under construction as well. Pegatron will offer technical assistance and maintain the remaining stake in the venture.

Per a December 27, 2023 report in the Economic Times, it was said that Apple is in advanced talks with Rayprus Technologies (subsidiary of Taiwan’s Foxconn), which makes high quality precision camera and lens solutions.

Per a December 12, 2023 report, American gorilla glass maker Corning, Inc., a key Apple supplier, was setting up a INR 10 billion (US$120.09 million) manufacturing facility in Pillaipakkam (near Sriperumbudur) in Tamil Nadu state. The location puts it in proximity to other Apple suppliers in India, which is why it is said to have finalized investment in Tamil Nadu over Telangana state. Corning, Inc. is a Fortune 500 material sciences company and inventors of the toughened display glass used in phones, tablets, monitors, etc.

Have Apple contract manufacturers benefited from the production linked incentives program?

Apple has benefited from India’s US$4.66 billion production-linked incentives (PLI) scheme for mobile devices as well as support initiatives targeting IT and electronics manufacturing. In its third year, the PLI scheme has likely contributed to the jump in Apple’s iPhone exports from India.

Apple has exceeded its targets in five out of six parameters set by the PLI scheme, as reported by Business Standard in July. To qualify for PLI incentives, companies must meet targets in four areas: incremental production value, exports, investment, and freight-on-board (FoB) value. Apple’s India vendors—Foxconn, Pegatron, and Tata Electronics—have collectively surpassed these targets. Between April and July 2024, Apple exported 85 percent of the FoB production value, totaling INR 401.45 billion, surpassing its target of exporting 81 percent of iPhones by value by FY26. This milestone includes iPhone exports worth INR 340.89 billion within the four-month period, largely driven by the PLI scheme, with Apple reaching approximately US$5 billion in iPhone exports from India from April to August this fiscal year—a growth of over 50 percent from the same period in FY24.

Apple market strategy for India

Starting with its September 2023 lineup, Apple launches its iPhones on the same day as its global release. Also, while the majority of iPhone units is still produced in China, India-assembled devices are steadily growing—targeting both export and domestic markets. From 2024, India-based plants will be involved in the assembly of the ultra-premium Pro models.

In April 2023, Apple opened its first official stores in India, with the flagship store at Reliance Jio World Drive Mall in Bandra Kurla Complex, Mumbai and a second store at New Delhi’s Select Citywalk Mall.) Now, Apple plans to open two new stores—in Bengaluru and Pune.

Apple’s market share is currently less that 7 percent in the Indian market, which is dominated by Chinese smartphone brands OnePlus, Xiaomi, Oppo, and Vivo. However, the company is betting big, especially in metropolitan hubs via its official flagship stores, alongside its longstanding official premium retailers’ network across the country. 

Tata’s entry into the Apple supply chain in India

Having taken over the factory from Wistron Corp. in 2023, the Tata Group produced around US$1.7 billion worth of iPhones at its Karnataka plant over the last six months. The Tata Group took over Wistron’s assembly operations at Narasapura in Karnataka state’s Kolar district for US$125 million.

Tata Electronics is expected to commence production at its new iPhone assembly facility in Hosur’s Koothanapalli area later this year. Operations were temporarily suspended at the company’s components factory in Hosur in October after a fire broke out, although shipments for the next 3 months were ready. The 250-acre new facility is Apple’s fourth such assembly plant and second largest in India and will supply iPhone 15 and iPhone 16 cases. Hosur is located along the River Ponnaiyar, 40km (25 miles) southeast of Bengaluru, Karnataka. The driving distance between Narasapura Industrial Area and Bengaluru is 53km (32.9 miles).

Who are Apple’s contract manufacturers in India?

Foxconn, Pegatron, and Wistron manufacture ‘end-to-end’ phones in India. Tata is a newcomer to the Apple assembly line and has taken control of Wistron’s operations.

Which Apple component suppliers are located in India?

There are 14 suppliers for the iPhone maker in India as per the company’s 2022 Apple Suppliers Catalog and new additions in 2023.

Apple component suppliers in India include:

• Cheng Uei Precision Industry Company Limited (Foxlink) – Andhra Pradesh
  The Taiwan company specializes in the design, manufacturing, and sale of connectors, cable assemblies, power management devices, and battery packs on an OEM/ODM basis.
• Flex Limited – Tamil Nadu
  US-based firm provides global supply chain and manufacturing solutions.
• Hon Hai Precision Industry Company Limited (Foxconn) – Tamil Nadu
  The Taiwan firm is a leading global technology manufacturing and services provider and is Apple’s biggest supply chain partner.
• Jabil Incorporated – Maharashtra
  US-based firm makes AirPod components (plastic bodies), which are shipped to Vietnam and China where the AirPod wireless earphones are assembled. Has two operational units at the Ranjangaon Maharashtra Industrial Development Corporation Zone in the city of Pune. (Jabil also make Wi-Fi, NFC, RFID, camera optics in these plants for clients.) The company is looking to expand operations in India with two more units at additional investments of US$250 million-US$275 million (INR 21.02 billion-23.12 billion). Going forward, a source quoted in the Economic Times speculates that Jabil may get into making plastic casings for Apple chargers, some older iPhone models, AirPods, and some components for Apple watches and Mac. It could be a mix of assembly and manufacturing. As of September 2023, Jabil has signed an MoU with the state government of Tamil Nadu to set up an electronics manufacturing plant in Tiruchirappalli.
• Molex Incorporated – Karnataka
  US-based firm and a Koch Company, it is involved in IoT infrastructure and is a connectivity innovator. It is a recent entry onto Apple’s India supplier list and has set up a manufacturing facility in Karnataka.
• Lingyi iTech (Guangdong) Company – Tamil Nadu
  The Chinese firm is involved in smart manufacturing, precision functional components, structural components, modules, chargers, adapters, and power management systems. It has a facility in Tamil Nadu.
• ON Semiconductor Corporation – Tamil Nadu
  Onsemi is US-based and a recent entry onto Apple’s India supplier list. The firm is a Fortune 500 company with a manufacturing facility in Tamil Nadu.
• Shenzhen Everwin Precision Technology – Uttar Pradesh
  The China-based firm is involved in the design, production, and distribution of electronics parts and components, with a facility in Uttar Pradesh. It is a recent entry on Apple’s India supplier list.
• Shenzhen YUTO Packaging Technology Company Limited – Karnataka
  China-based supplier with a factory in Bengaluru.
• Sunwoda Electronic Company Limited – Uttar Pradesh
  China-based firm with a facility in Noida.
• Taiwan Surface Mounting Technology Corporation
  Taiwan-based firm with a facility in Tamil Nadu.
• Wistron Corporation – Karnataka [taken over by Tata Electronics]
• Zhen Ding Technology Holding Limited – Tamil Nadu
• Pegatron Corporation – Tamil Nadu

14 China-based Apple component suppliers seek to set up in India: January 2023

As per reporting from Bloomberg on January 18, the Indian government gave initial clearance to 14 of 17 Chinese suppliers submitted by Apple for operating in India. The companies are expected to find a joint venture (JV) partner in India and then seek full approval for setting up. Indian officials have reportedly said they will not allow the Chinese firms to set up a wholly owned entity in India.

The suppliers with initial clearance include Sunny Optical Technology, which already have an India presence as they do business with Xiaomi, Oppo, and Vivo; Han’s Laser Technology Industry Group Co.; and Shenzhen YUTO Packaging Technology Co.

Sunny Opotech, a unit of Zhejiang-based Sunny Optical Technology has reportedly signed a deal with Apple to invest US$300 million to set up an India facility. The firm intends to roll out the project in phases till 2026 but is yet to finalize a location for the facility. Speaking with Businessline, Welly Liu, President of Sunny Opotech India, said the company aims for its new investment to “increase the revenues of the camera module business unit (BU) to $10 billion by 2026 from the present $3.5 billion.” Since the last three years, Sunny Opotech has been making camera modules for Android phones at a Tirupati facility (Andhra Pradesh state) in partnership with Celkon (Seven Hills).

Note: As of November 2023, AirPods and iPhone assembler Luxshare Precision Industry Co. has not been able to expand its India presence, opting instead to shift to Vietnam. The company cited India-China political tensions.

Where are Apple products manufactured in India?

Electronics manufacturing ecosystem in South India

All three of Apple’s major contract manufacturers have operations located in the southern Indian state of Tamil Nadu. The state is a national powerhouse when it comes to electronics and hardware – accounting for 20 percent of the national production. The state is aiming to increase the share to 25 percent and enhance the industry’s output to US$100 billion by 2025 through the promotion of special economic zones (SEZs).

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Tamil Nadu has two exclusive SEZs for electronics and hardware manufacturing – at Sriperumbudur and Oragadam in the Kancheepuram District. State and central government incentives, along with an abundance of skills in the region, have contributed to the Taiwanese firms setting up their operations in the state.

According to reports, the state of Tamil Nadu is home to 16 major electronics producers, including Nokia, Samsung, Flex, Dell, Salcomp, and HP.

Foxconn’s recent investment plans across South India

Foxconn now has investments across South India – in Telangana, Karnataka, and Tamil Nadu. These states and Andhra Pradesh are also competing to be the location of a proposed Foxconn City, similar to its industrial townships in China and home country Taiwan.

• Karnataka: Per media reports in August 2024, Foxconn will invest INR 220 billion to establish a large-scale iPhone assembly plant (Project Elephant). The company has acquired land near Kempegowda International Airport in Devanahalli, Bengaluru, worth US$37 million. The manufacturing facility is located within the Information Technology Investment Region (ITIR) industrial area in Doddaballapur, Devanahalli Taluk in Bengaluru Rural District. Additionally, Foxconn has announced Project Cheetah, under which it will develop a manufacturing and assembly facility for EV mechanical components – for which private land has been leased in the Bengaluru District.
  Separately, subsidiary Foxconn Industrial Internet (Fii) has expressed interest in investing INR 80 billion (approx. US$948 million) in setting up a supplementary plant alongside the Foxconn unit in the Devanahalli ITIR area.
• Telangana: In May 2023, Foxconn broke ground for a US$550 million facility in Kongara Kalan in Rangareddy district, at the outskirts of capital and IT hub Hyderabad. As of August 2024, the first phase of Foxconn factories spread over 1.6 million sq. ft. was completed, according to former Industries and IT Minister K. T. Rama Rao. Per an October 15, 2024, media report, commercial production at the plant on which the fixed capital investment was pegged at INR 48.33 billion was likely to commence by the year end, with AirPods expected to be produced at the facility.
• Tamil Nadu: Foxconn is the world’s largest technology contract manufacturer, and its India facilities take orders for multiple electronics brands. The company recently inaugurated a huge residential complex for its women workers at Sriperumbudur. Spread over 20 acres, the facility has 13 blocks with 10 floors each, offering dormitory residences to up to 18,720 workers. Foxconn employs 41,000 workers in Tamil Nadu, of which 35,000 are women. Foxconn will be adding to its production roster the assembly of Google Pixel phones and drone manufacturing.

India wants to become an integral part of the Apple supply chain

India aims to integrate itself into Apple’s supply chain, with ambitious predictions from analysts foreseeing a significant increase in iPhone production capacity. Forecasts range from 25 percent of global production by 2025 (JPMorgan) to 50 percent by 2027 (Taiwan’s DigiTimes). Despite these optimistic projections, over 90 percent of iPhones are currently manufactured in China, where Apple has established a robust supply chain spanning nearly two decades. Presently, India contributes to seven percent of Apple’s iPhone production.

Koushan Das, Assistant Manager at the Business Intelligence division at Dezan Shira & Associates notes, “We have already seen an increase in the production volume for phones in the existing facilities in India. Going forward, contract manufacturers will continue to ramp up local production in India, but it is also expected that several suppliers will join to ensure smoother operations. Already a few suppliers are in talks with the government – now picked up by international media – although these suppliers also provide components to other brands justifying their shift to India.”

Das predicts that Apple could move the production of additional products from its portfolio, such as tablets, earphones, or laptops, to India, though the decision will face stiff competition from Southeast Asian production hubs.

“For companies positively considering a move to India, the country offers various options with respect to location, as states continue to compete in areas such as incentives offered, skilled workforce, government support, and an easier land acquisition process”, he added.

Reducing production reliance on China

Apple, like many Western companies, aims to reduce its reliance on China for production, prompted by the ongoing US-China trade war and the consideration of geographical de-risking strategies in supply chain decision-making.

The COVID-19 pandemic also served as another tipping point in favor of diversified supply chains rather than concentration in any single market. For example, Apple’s contract manufacturer, Foxconn, had to halt operations at its Zhengzhou assembly plant in November 2022 due to Beijing’s Covid-zero approach, resulting in warnings of delayed global shipments.

Previously, seeking alternatives to China was influenced by the country’s rising labor costs.

Nevertheless, Apple’s large-scale move out of China will not be anytime soon as it relies on key manufacturing and assembly partners in the country like Luxshare Precision (maker of AirPods, the Apple Watch, iPhone 15, and iPhone Pro Max, and assembler of the MR headset).

Further, geopolitics may also impact investments from Chinese companies in Apple’s supply chain in India. For example, Luxshare reportedly decided to invest US$330 million [in November 2023] in Vietnam’s northern province of Bac Giang only after many failed attempts to expand its operations in India due to political tensions.

Around the same time, India finally announced fresh rules aimed at expediting visa approvals for Chinese nationals employed in PLI sectors. FDI from China is closely vetted by India’s security establishment.

China plus one: India faces competition from Southeast Asia

While India offers advantages such as a wealth of low-cost labor and government incentives, challenges in workforce training and social factors must be addressed. Southeast Asian nations, exemplified by Vietnam, present attractive alternatives for electronics and hardware production, leveraging abundant and affordable labor forces, OEM/ODM networks, and proximity to China.

This article was originally published January 17, 2023. It was last updated November 19, 2024.

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