In a development that marks Apple Inc’s push to expand its manufacturing in India – the world’s second biggest phone market, Taiwan’s Wistron Corp stated, it plans on assembling printed circuit boards (PCBs) for Apple’s iPhones at its new factories in southern India, said two sources.
The local assembly of PCBs in India by Wistron will be a first for the company. Apple began producing its SE model in the southern tech hub of Bengaluru in 2017 and currently assembles the 6S and 7 there as well.
Wistron’s second iPhone factory, some 40miles (65 km) from Bengaluru, is expected to become operational by April, said sources while that the new plant will produce iPhone 7 and 8 models, some of which will be exported.
The new plant will have a capacity to produce up to 8 million smartphones per year, said sources. Foxconn, Wistron’s bigger rival, has already started producing iPhone XR models in India since 2019.
For Apple, the deepning of PCB assembly in India is likely to significantly reduce Apple’s tax profile in India since it will save on import taxes on smartphone components.
While Apple declined comment, Wistron did not respond to requests for comments.
While earlier, Apple had a large manufacturing base in China for its phones, it has gradually expanded that to other countries, so as to become less dependent on China in the wake of the U.S.-China trade war.
For Apple, India is a huge opportunity. Despite the fact that its market share by shipment volumes is just over 1%, it is among the fastest growing smartphone brands in India in the fourth quarter of December 2019, according to market researcher Counterpoint.
Although, India is currently largely dependent on China for supplies of smartphone parts such as printed circuit boards, display panels, cells, and camera modules, the deadly coronavirus outbreak in China could cause more companies to shift their production bases outside China, said sources.
China’s coronavirus epidemic has killed more than 250 and its economic fallout is likely to be a huge set back to its recovering economy.