Pegatron India's iPhone factory shutdown to go into third day after fire - sources (updated)

Wistron

26/09/2023 11:19

(Adds details on plant in paragraph 7, context and details of
fire in paragraphs 9-14)
    By Praveen Paramasivam, Aditya Kalra and Munsif Vengattil
       CHENGALPATTU, India Sept 26 (Reuters) - A production
shutdown at Apple supplier Pegatron's  4938.TW  India iPhone
factory is expected to extend into Wednesday and disruptions
could last longer as authorities investigate a fire at the
Taiwanese firm's only India plant, four sources said.
    Pegatron described the Sunday fire as a "spark incident"
which caused no injuries and said has "no financial or
operational impact to Pegatron Corporation", but called off all
assembly shifts for Monday and Tuesday, Reuters previously
reported. 
    Four sources briefed on the matter said Wednesday shifts
were also unlikely. One of them said damage was being repaired
at the plant in Chengalpattu area near the southern city of
Chennai in Tamil Nadu state, and in the worst case the shutdown
could last the entire week.
    One of the sources said Apple representatives were
collaborating with Pegatron after the incident. 
    Apple and Pegatron did not respond to requests for comment.
    Pegatron has asked independent surveyors to assess the fire
damage, a fifth source said. All the sources declined to be
identified as they are not authorised to speak to media.
    On Tuesday, the gates of the factory remained shut with only
a few workers allowed inside. Many company buses which typically
ferry employees from their accommodation to the plant were
parked outside the facility. A board displayed outside the
factory stated it assembles about 5 million phones a year. 
    The disruptions are the latest to impact Apple  AAPL.O 
suppliers in India, a country where the U.S. tech giant is fast
expanding manufacturing of iPhone and other devices for domestic
and export markets. The affected Pegatron India plant accounts
for 10% of Apple's iPhone production in the country.
    This is not the first time facilities producing
Apple-related products have been disrupted in India. 
    A state industrial safety official said the Pegatron fire
started from a charging rack - where phones are tested after
assembly - located at the first floor of the building, at around
8 p.m. on Sunday when around 29 workers were present. 
    They left the facility as soon as they saw black smoke and
six machines were damaged during the fire, the official added,
without explaining what type of machines were affected.
    The facility is spread across 39,000 square metres and has
roughly 8,000 workers on the assembly line. It does not make
iPhone 15 but assembles older variants of the smartphone.
    Apple has bet big on India since it began iPhone assembly in
the country in 2017 via Wistron  3231.TW  and later Foxconn
 2317.TW , as the Indian government pushed for local
manufacturing.
    Pegatron, which started iPhone assembly in India in
September last year, is also in talks to open a second Indian
contract facility for Apple near the existing one in Tamil Nadu.
        

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FACTBOX - Recent disruptions at Apple facilities in India    https://reut.rs/46rEcDg
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 (Reporting by Praveen Paramasivam, Aditya Kalra and Munsif
Vengattil; Editing by Kim Coghill and Jacqueline Wong)
 ((aditya.kalra@thomsonreuters.com; @adityakalra;))