Tata, Pegatron in partnership talks for iPhone assembly in India's Tamil Nadu - sources

Wistron

01/02/2024 14:37

By Munsif Vengattil and Aditya Kalra
       BENGALURU/NEW DELHI, Feb 1 (Reuters) - Tata Group is in
advanced talks with Taiwan's Pegatron  4938.TW  to form a
partnership to run an iPhone assembly plant the Indian company
is building in the southern state of Tamil Nadu, two sources
with direct knowledge of the matter said on Thursday.
    Tata is building the iPhone assembly plant in Hosur city,
which will be its second such facility in the country. The move
comes as Apple  AAPL.O  and its contract manufacturers are
rapidly expanding their India operations.
    Tata is in talks to form a joint venture with Pegatron for
the Hosur plant - its first such initiative - that would help
speed up its plans to start manufacturing, said the two sources,
who declined to be named as the talks are private and the deal
has not been closed.
    The Taiwanese firm would provide technical and engineering
support at the plant, the sources said.
    Pegatron did not immediately respond to a request for
comment outside business hours in Taiwan. Tata and Apple also
did not immediately respond.
    Tata's success is crucial to Apple's ambitions. The U.S.
firm has been diversifying beyond China following COVID-19
disruptions and geopolitical tensions and the proportion of
iPhones made in India is expected to reach 20-25% this year,
from 12-14% in 2023, according to Apple analyst Ming-Chi Kuo. 
    Tata's new plant with Pegatron is expected to have 20 lines
for iPhone assembly, one of the sources said, adding that the
Indian firm would hold a majority stake in the joint venture.
    "Tata cannot build everything from scratch," said the second
source, explaining the rationale behind the tie-up. 
    Tata's first iPhone assembly plant is in the southern state
of Karnataka which it took over from Taiwan's Wistron last year.
    Independently, Pegatron already operates an iPhone assembly
plant in Tamil Nadu and is in talks  to add a second facility.
It currently accounts for about 10% of Apple's iPhone output
in India, with Taiwan's Foxconn accounting for most of the rest.

 (Reporting by Munsif Vengattil in Bengaluru and Aditya Kalra in
New Delhi
Editing by Mark Potter)
 ((munsif.vengattil@thomsonreuters.com;))