Tata Strengthens iPhone Manufacturing In India With Pegatron Stake Acquisition

In a significant move aimed at bolstering its iPhone manufacturing capacity, India’s Tata Electronics has secured a majority stake in Pegatron’s only iPhone plant in India. According to Reuters, the deal, announced internally last week, will see Tata Electronics owning 60% of the plant in a newly formed joint venture, while Pegatron will retain the remaining 40% and provide technical support. This partnership marks another important step in Tata’s expanding footprint in the global smartphone manufacturing sector and its close ties with Apple.

Tata’s Growing Influence in iPhone Manufacturing

Tata Electronics’ acquisition of the majority stake in the Pegatron plant in Chennai, India, strengthens its position as a key player in Apple’s supply chain. Pegatron, a Taiwanese contract manufacturer, had been operating the Chennai facility, which is dedicated to iPhone production. The move follows reports from Reuters in April that Apple is keen on diversifying its supply chain away from China due to ongoing geopolitical tensions. India is emerging as a key hub in Apple’s plans, and this deal positions Tata Electronics at the forefront of this shift.

While the financial details of the deal remain undisclosed, industry sources have confirmed that Tata will assume responsibility for daily operations at the plant. The Pegatron facility currently employs around 10,000 workers and has the capacity to produce 5 million iPhones annually. With the acquisition, Tata will gain more control over the production process and strengthen its role in the manufacturing of iPhones for the Indian market and beyond.

A Boost to India’s iPhone Production

This new venture is part of Tata Electronics’ broader strategy to expand its iPhone manufacturing capabilities. Tata already operates an iPhone assembly plant in Karnataka, which it took over from Taiwan’s Wistron last year. Additionally, Tata is building another iPhone assembly plant in Hosur, Tamil Nadu, and has an iPhone component plant in the region, which faced a fire incident in September.

The Chennai Pegatron plant will now become Tata’s third iPhone facility in India, marking a significant expansion of its production capacity. With the rise of India as an iPhone manufacturing hub, analysts predict that the country will account for 20-25% of total global iPhone shipments this year, up from 12-14% last year.

Tata-Pegatron Deal to Enhance India’s Role in Apple’s Supply Chain

Apple has been making concerted efforts to diversify its manufacturing away from China in response to geopolitical pressures. The deal between Tata Electronics and Pegatron highlights India’s growing importance in Apple’s global supply chain. India’s relatively favorable labor costs, along with government incentives for manufacturing in the country, make it an attractive destination for Apple’s contract manufacturers.

Tata’s growing involvement in iPhone production further solidifies the conglomerate’s ambitions to become a key player in the global electronics manufacturing sector. As a result, the Tata-Pegatron deal not only benefits Tata Electronics but also contributes to India’s broader ambitions to become a global manufacturing hub for electronics.

The Road Ahead for Tata and Pegatron

With the Tata-Pegatron partnership in place, both companies are set to file for approval from the Competition Commission of India (CCI) in the coming days to formalize the agreement. As the deal progresses, it will be interesting to see how Tata Electronics leverages its new position to expand its footprint in the global supply chain, particularly in light of Apple’s ongoing efforts to diversify production outside of China.

For now, the deal represents a major milestone for Tata Electronics, strengthening its position as a key partner for Apple in India and contributing to the nation’s burgeoning role in global iPhone manufacturing.

(WITH AGENCY INPUTS)

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