Apple’s Global Manufacturing Strategy Tilts Towards India With Taiwan Factories Playing Leading Role

An Indian customer waits to receive his Apple iPhone 6 at the Unicorn Infosolutions Apple Premium Reseller store in Ahmedabad early on Oct. 17, 2014. (Sam Panthaky/AFP via Getty Images)

Apple’s latest phone model iPhone 14 is set to be produced and assembled in India, with Taiwan-based foundries Foxconn, Wistron, and Pegatron playing key roles.

News that Apple has begun assembling iPhone 14 models in India, was released on Sept. 26 and is being seen as another indication that the tech giant’s global production strategy is tilting away from China.

J.P. Morgan has predicted that Apple will shift 5 percent of its global iPhone 14 production to India by this year and 25 percent by end of 2025.

A Foxconn plant located 40km away from Chennai, the capital of Tamil Nadu, is assembling the iPhone 14. The plant has also been assembling iPhone 13 since April, Reuters reported.

In 2017, Apple first assigned Taiwanese electronics manufacturer Wistron to produce the Indian-made iPhone while Foxconn followed a year later. A third Taiwanese foundry Pegatron set up an assembly plant in India in 2021, according to Taiwan-based Business Today.

Indian-made iPhones are expected to increase by more than 70 percent this year to 12 million units, compared to 7 million units last year, as reported by Digitimes, a Taiwan-based news media focus on semiconductor and electronics industries, on Sept. 7.

People exit from the gate of Wistron, a Taiwanese-run iPhone factory at Narsapura, about 60 km from Bangalore on Dec. 13, 2020. (Manjunath Kiran/AFP via Getty Images)

Advantages of Taiwanese Assembly Plants

From the early launch of the iPhone third generation series to now, only those three Taiwanese plants—Foxconn, Wistron, and Pegatron—are able to meet Apple’s specifications, Taiwan financial expert Shiu Chin-Huang told The Epoch Times.

“It is not easy to assemble smartphones as it requires more and smaller components and higher assembly complexity,“ he said. ”Furthermore, factories must deliver the specified quantities and minimize defects while controlling costs.”

Shiu said that the electronic component manufacturing company Luxshare in mainland China is also incorporated into Apple’s supply chain, but Apple currently allows it to make part of the iPhone 14 series, mainly supplying the Chinese market.

Luxshare’s assembly capacity cannot compete with Foxconn, said Shiu, citing that Luxshare is unable to meet Apple’s quality requirements, as the high-end iPhone 14 pro series requires higher complexity of assembly technology.

Made in India

Apple’s shift comes as businesses in China have been dealing with a worsening business environment including disruptive zero-COVID policies, tightening regulations, and international tensions.

Asked why he thought Apple was looking beyond China, Shiu said he believed it was due to the communist authorities’ aggressive desire for personal data control and market share of the benefits.

As an example, Shiu said that this year regulators told Apple that cell phones sold to the Chinese market should have a certain ratio of Chinese domestic production and must use NAND flash, a storage device made by state-backed Yangtze Memory.

Apple’s tipping its manufacturing base to India represents its global layout, which would be that “iPhones sold to China are made in China", while phones made in India can be sold to the whole world, Shiu said.