Tata to Take Over iPhone Plant to Increase Apple Supply

The Tata Group is close to acquiring a major plant in southern India, which would make the country the first to have a homegrown iPhone maker.
Tata Group is in talks to buy a majority stake in a joint venture with Wistron Corp., the owner of a factory in India. The two firms have been discussing various potential tie-ups for months, and the deal is expected to be completed by the end of March, according to two people familiar with the process. Tata is set to oversee the main manufacturing operation, with support from Wistron, the people said.
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Apple Inc.'s iPhones are mainly assembled by Taiwanese manufacturing giants like Wistron and Foxconn Technology Group. Tata's deal would advance India's efforts to create local contenders to challenge China's dominance in electronics. This is an important goal because China's dominance in electronics has been jeopardized by political tensions with the US and Covid-related hurdles.
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The Indian conglomerate Tata is aiming to complete a due diligence process by March 31 so that its Tata Electronics arm can formally take over Wistron's position in a program that gives it government incentives, one of the people said. The next cycle of incentives will begin from April 1, which marks the start of India's financial year.
The acquisition could value Wistron's only iPhone manufacturing operation in India at more than $600 million if the Taiwanese company meets the requirements to receive the expected incentives for the current financial year, one source said.
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A representative for Tata declined to comment when reached for comment. Wistron and Apple did not respond to requests for comment.
N Ganapathy Subramaniam, operating chief at Tata Consultancy Services Ltd., said that the proposed electronics manufacturing hub in India has the potential to create significant opportunities for the country's electronics and microelectronics industries. Subramaniam's remarks come as TCS, the largest listed subsidiary of the Tata Group, is itself ramping up its electronics manufacturing capabilities.
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Subramaniam, who is brother to Tata Group Chairman Natarajan Chandrasekaran, said that a deal would mark a step toward establishing India as a cutting-edge electronic manufacturing base.
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Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron Corp. While its main business is manufacturing iPhones, it has sought to diversify into other areas such as servers. In 2020, it agreed to sell its iPhone production business in China to a competitor.
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Even as Wistron plans to exit iPhone-making in India, its Taiwanese peers are expanding their iPhone production lines. Apple is seeking to reduce its dependence on China, where pandemic-related supply chain snarls and draconian restrictions have wrought havoc on device production.
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Tata is in talks to acquire Wistron's 2.2 million square-foot factory located just over 30 miles (50 kilometers) east of Bangalore. If the acquisition goes through, Tata would take over all eight of Wistron's iPhone lines, as well as the plant's 10,000 workers, including a couple thousand engineers. Wistron would continue as a service partner for iPhones in India.
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Tata is taking steps to increase its business with Apple. It has accelerated hiring at its factory in Hosur, near Bangalore, where it produces iPhone components. That plant has the potential to produce iPhone manufacturing lines in the coming years. Tata has also announced that it will launch 100 Apple stores in India, the first of which is set to open in Mumbai this quarter.
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The Tata Group, which is 150 years old, makes everything from branded salt and Tetley Tea to steel and Jaguar cars. It also runs an airline and Starbucks cafés in the country. Its TCS is Asia’s largest IT outsourcing company and one of India’s most valuable by market capitalization.
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In recent years, Chairman Chandrasekaran has stepped up efforts to make the conglomerate more tech-centric, with a range of e-commerce initiatives and a new super-app called Tata Neu. He also announced plans for the group to enter the chipmaking industry last year.