The potential transfer of control of Pegatron's iPhone manufacturing facility in India to the Tata Group marks a significant development in the country's electronics manufacturing landscape. With Pegatron's retreat from its partnership with Apple and Tata's growing ambitions in iPhone manufacturing, the proposed joint venture presents strategic opportunities for both parties.
If the agreement materializes, Tata would hold a minimum 65% stake in the joint venture, with Pegatron retaining the remaining stake and providing technical assistance. This partnership aligns with Apple's broader strategy of diversifying its supply chain beyond China, particularly amidst geopolitical tensions.
For Tata, acquiring control of the Pegatron plant represents an opportunity to bolster its iPhone manufacturing capabilities in India. With existing involvement in iPhone assembly through a plant in Karnataka and ongoing construction of another facility in Hosur, Tamil Nadu, Tata aims to strengthen its position in the iPhone manufacturing landscape.
The Pegatron facility near Chennai, currently employing approximately 10,000 workers with an annual production capacity of 5 million iPhones, presents Tata with a significant asset. Additionally, discussions suggest that Tata may also take over Pegatron's developing iPhone factory at its Chennai campus as part of the deal, further enhancing its manufacturing footprint.
As Apple's iPhone manufacturing partners in India expand, analysts project a substantial increase in India's contribution to total iPhone shipments. This growth trajectory underscores India's growing importance as a manufacturing hub for Apple products.
The reasons behind Pegatron's gradual withdrawal from its Apple business, particularly in India, remain undisclosed. However, last year's divestment from the China plant was attributed to capital-raising efforts aimed at optimizing its business.
Overall, the potential joint venture between Tata and Pegatron signals a significant step forward in India's electronics manufacturing ecosystem and underscores the country's emergence as a key player in the global supply chain for smartphones and other electronic devices.
