Tata Group To Take Over iPhone Maker’s Plant Near Bangalore
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Tata Group To Take Over iPhone Maker’s Plant Near Bangalore

Tata Group is on the point of acquiring a significant plant in southern India, creating the country’s first homegrown iPhone manufacturer.

According to two people familiar with the process, the airline-to-software conglomerate has been in talks with the factory’s owner, Taiwan’s Wistron, for months and hopes to complete the purchase by the end of March.

The two companies discussed various potential collaborations, but talks are now focused on Tata taking a majority stake in a joint venture, according to the sources.

The main manufacturing operation will be overseen by Tata, with assistance from Wistron, according to the people who asked not to be identified because the plans aren’t public.

Taiwanese manufacturing behemoths such as Wistron and Foxconn Technology Group assemble most of Apple’s iPhones.

Tata’s agreement would help India build local rivals to challenge China’s dominance in electronics, which has been hampered by political tensions with the US and Covid-related obstacles.

As per some media reports, the Indian conglomerate plans to complete a due diligence process by 31 March so that its Tata Electronics arm can formally take over Wistron’s position in a government-sponsored program.

The next round of incentives will begin on 1 April, the start of India’s fiscal year.

According to the media report, the acquisition could value Wistron’s sole iPhone manufacturing operation in India at more than USD 600 million if the Taiwanese company meets the requirements for the expected incentives for the current fiscal year.

Wistron, along with Foxconn and Pegatron, is one of three Taiwanese iPhone manufacturers in India. It has attempted to diversify its business beyond low-margin iPhone manufacturing into areas such as servers; It agreed to sell its Chinese iPhone production business to a competitor in 2020.

Despite Wistron’s plans to exit iPhone production in India, its Taiwanese competitors are expanding their iPhone production lines.

Apple, the world’s most profitable smartphone manufacturer, is attempting to reduce its reliance on China, where pandemic-related supply chain disruptions and draconian restrictions have wreaked havoc on device production.

Wistron’s 2.2 million-square-foot facility is about 30 miles east of Bangalore. If the deal is completed, Tata will take over all eight iPhone lines and the plant’s 10,000 employees, including a couple of thousand engineers. Wistron would continue to be an iPhone service partner in India.

Tata has taken additional steps to expand its business with Apple. It has increased hiring at its Hosur, near Bangalore, factory, where it manufactures iPhone components. This plant is located on several hundred acres of land where Tata may add iPhone production lines in the coming years.

Tata has also announced plans to open 100 Apple stores in the country of 1.4 billion people, the first of which will open in Mumbai this quarter.

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