Pegatron facility in Chennai, India. Image: Reuters/Praveen Paramasivam
Tata Electronics Private Limited (TEPL), a Tata Group company, has successfully formed a joint venture (JV) with Pegatron, Apple’s second-largest manufacturing partner in India. Initially, Tata will hold a 60 percent stake, while Pegatron will retain the remaining, a source with firsthand knowledge of the deal tells Forbes India on condition of anonymity.
On November 15, Tata officials met with Pegatron’s leadership to confirm the JV. This partnership will boost Tata’s iPhone manufacturing plans, complementing its existing iPhone assembly plant in Karnataka, acquired from Taiwan’s Wistron last year, and another under construction in Hosur, Tamil Nadu, where Pegatron will be its JV partner.
The two companies had been in discussions for the deal, which has now come to fruition. Forbes India had reported in April that Tata was in the process of taking over Pegatron’s Tamil Nadu plant. The necessary paperwork has been completed, and the acquisition is expected to be officially announced soon.
Apple’s iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is crucial to Apple’s growing ambitions in India, having become the first Indian company to manufacture Apple iPhones domestically after acquiring a 100 percent stake in Wistron last year.
Pegatron’s India factory employs approximately 10,000 people and produces 5 million iPhones every year. This facility is now the company’s sole iPhone manufacturing site, following the divestment of its Chinese plant to rival Luxshare in a $290 million deal last year.
Tata Electronics plans to recruit over 20,000 additional employees for its new iPhone assembly plant in Hosur, Tamil Nadu, increasing the facility’s workforce to 40,000, announced N Chandrasekaran, chairman of Tata Sons. Chandrasekaran made this statement in late September at the groundbreaking ceremony of Tata Motors and Jaguar Land Rover’s (JLR) Rs9,000 crore manufacturing unit in Panapakkam, Ranipet, Tamil Nadu.
Over the past three years, Apple has relocated 12 to 14 percent of its iPhone production to India, driven by the government’s Production Linked Incentive scheme. Despite this, China still accounts for over 85 percent of iPhone manufacturing. Apple continues to aggressively expand its Indian production capacity, capitalising on the country’s status as the world’s second-largest smartphone market. Around 70 percent of the domestically manufactured iPhones are exported to global markets, including the US.