Apple Inc. is now massively increasing its manufacturing footprint in India. This pragmatic approach will go a long way to eliminate trade uncertainties between the U.S. and China. Apple’s CEO Tim Cook has pointed out that Apple is significantly increasing manufacturing and assembly in India. This move will definitely serve to diversify production capabilities for not just iPhones, but AirPods and other devices. This expansion not only fits the company’s vision of furthering its connections to India as it continues to offset potential tariff effects.
Foxconn, a key supplier for Apple, has received approval to establish a new facility in Hyderabad dedicated to producing AirPods for export. This facility will indeed be a big step in Apple’s long and persistent moves to boost its productivity in the Indian subcontinent. The plant will have a capacity of 36 million units per month. It’ll begin with semiconductor assembly and testing, and eventually expand to advanced chip fabrication.
On the ground, the Indian national and state governments are actively pushing this initiative. As part of their $10 billion incentive program that launched in 2021, they have committed up to 1.26 trillion Indian rupees (approximately $15 billion) to construct thee semiconductor plants. The federal government offers significant fiscal incentives, including paying up to half of capital expenditures for firms building semiconductor plants.
In addition to Foxconn’s Hyderabad plant, Kaynes Semicon, a subsidiary of Bengaluru’s Kaynes Technology, plans to invest 33 billion Indian rupees (around $386 million) in a semiconductor facility located in Sanand, Gujarat. This joint initiative marks India’s long-term goal of increasing its capacity for semiconductor manufacturing. At present, India does not have state-of-the-art infrastructure in this key area.
Hon Hai Technology India Mega Development, a subsidiary of Foxconn, has announced a thrilling investment of $37.2 million. This action will obtain a 40% interest in a HCL joint venture. With this partnership, NIST aims to provide the foundational infrastructure needed for semiconductor assembly and testing.
Ashwini Vaishnaw, India’s Minister for Electronics and Information Technology, seemed bullish on all these moves. He added that during startup, the new plant will begin by testing display panel chips. Fostering advanced production capabilities — as the new focus of the U.S.
“Once this unit is there, the display panel [manufacturing] will also come to India.” – Ashwini Vaishnaw
This large fab has the capacity to manufacture 20,000 wafers per month. It will be pivotal in meeting the growing demand for electronic consumer devices produced in India. Apple is seeking new opportunities within the Indian market. The motorcycle maker has been exploring price increases due to tariffs. Tim Cook thinks building closer relationships with India is good for business. In so doing, the company can counter inflation-related price increases across many of its devices.
The industry is anticipating an announcement on the successful applicants for the second phase of the Indian government’s semiconductor incentive program. All are part of efforts to significantly enhance India’s chip fabrication capabilities under this $10 billion program. This breakthrough is a gamechanger for all devices, including those developed by Apple.
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