Foxconn will invest $500 million to build manufacturing plants in Telangana, the latest in a string of investments by the key Apple contract partner to grow in South Asia.
Telangana’s IT minister, K.T. Rama Rao, tweeted that Foxconn’s “first phase” investment will create 25,000 direct jobs. Reuters reported that Foxconn, which makes iPhones in India, won a bid to make AirPods there earlier this year. Local media reported it bought $37 million in Bengaluru land this month.
Foxconn, Wistron, and Pegatron have committed to local production under Prime Minister Narendra Modi.
Foxconn entered India in 2006, years before its global competitors. “During this time, we have gained much experience managing local employees, supply chain, and logistics, which are important competitive advantages allowing us to move faster than the market. In addition, it helped us grow quickly. On an earnings call, Foxconn chairman Young Liu remarked, “We will increase production yield locally and continue this momentum.”
Our clients target mid-to-high-end products in India, which has 1.4 billion people. Thus, we must grow India’s assembly and component activities. We see more suppliers investing in Indian operations and think this will continue. India also has labor cost advantages. To remain competitive, Hon Hai will ask for government subsidies.
Apple’s manufacturing partners’ increased interest coincides with its efforts to expand manufacturing outside China.
JP Morgan analysts expect Apple, which established its first two retail locations in India last month, to manufacture 25% of iPhones in India by 2025.