The board of Pegatron, Apple’s second-largest contract manufacturer, is all set to make an initial investment of $150 million (approximately Rs. 1100 crore) to set up manufacturing facilities in India, its head executive said.
Pegatron’s factory in India is likely to start its production either in the second half of next year or in early 2022 and the company aims to make more investments in India over the next two years, CEO Liao Syh-jang said in an investor conference, last week. The project has been hindered due to the lockdown restrictions. “Due to the Covid-19 pandemic situation, it has been difficult for Pegatron staff to visit India, resulting in delays,” the company said.
Pegatron has to achieve the goal of manufacturing mobile devices worth Rs. 4,000 crore in the first year under the Indian government’s PLI scheme. Meanwhile, Pegatron’s China operations have run into problems. Apple said that it had discovered labor violations as it found the involvement of student workers at Pegatron factories in China and it would freeze new business with the firm until the situation is addressed.
Apple’s contract manufacturers in India
The three major Apple phone assemblers in India (Wistron, Foxconn, and Pegatron) are delighted with the Indian government’s Production-Linked Incentive scheme. Under this scheme, Apple will produce devices worth $50 billion approximately, locally over five years, a bulk of which will be for exports, according to government data.
The Production-Linked Incentive scheme offers companies cash incentives on a rise in sales of locally-made handsets over the next five years.
Wistron, Foxconn, and Pegatron are among the 22 phone makers that had got the go-ahead under the PLI scheme. While Wistron and Foxconn have manufacturing facilities in India (at Karnataka and Tamil Nadu respectively), it is Pegatron that is yet to finalize its operations.
Pegatron has a total number of 11 production facilities worldwide. It is also planning to set up a plant in the US. In India, it may set up its manufacturing unit in Tamil Nadu, where its office is currently registered.
Apple’s production this year till September last, was 1.2 million units in India. It is selling 42% of its production in India itself, but it is planning to grow its sales target for India.