BEIJING, March 3  (TMTPOST)— Apple's key supplier Foxconn Technology Group reported to greatly ramp up production capacity in India, as part of effort to reduce reliance on mainland China.

Source: Visua China

Foxconn plans to invest about $700 million to build a new plant, covering 300 acres, Bloomberg cited people familiar with matter on Friday. The plant is said to be located near the airport in Bengaluru, the capital of the southern Indian state of Karnataka and one of the leading technology hubs in India. It is anticipated to create 100,000 jobs and may not just make iPhone parts and assemble the device, but produce some parts for Foxconn’s electric vehicle business, according to the sources.   

Besides the plant in Karnataka, Foxconn is mulling another new production site in Hyderabad, the capital of southern India's Telangana state, as well as a silicon carbide fabrication plant and packaging facility for its semiconductor business, the Wall Street Journal reported on Friday, citing people with knowledge. The top iPhone maker is also poised to expand production in its existing facility in Chennai, the capital city of the southern Indian state of Tamil Nadu, aiming to boost iPhone production from about 6 million to 20 million by 2024, and its workers there around tripling to as many as 100,000, according to the report.

These are the latest signs of Apple and its suppliers’ pivot from China, the biggest manufacturing hub in the electronics supply chain that boasts a number of production of supply chain and assembly workload for the U.S. tech giant.

Apple announced in last April to start making iPhone 13 in India, which seems as one of signs to highlight increasing importance of countries like India, Vietnam and Mexico for suppliers who try to improve diversification of production away from China. Five months later, Apple confirmed it was assembling iPhone 14 in India, less than three weeks from its release of the new iPhone series.The confirmation suggests India will first make the latest flagship iPhone.  

In early October, Apple was reported to talk with suppliers to move some AirPods and Beats production to India and begin production as early as 2023, which will allow India for the first time to become a region for its headphone supply.

A report last December said Apple was telling suppliers to plan more actively for assembling its products in other Asian countries, particularly India and Vietnam. Another report that month said Apple plans to for the first time make its MacBook computers in Vietnam in 2023, and has tapped Foxconn, the world’s largest electronics manufacturer for the production in the Southeastern Asian country as early as around May.

Piyush Goyal, the Commerce and Industry Minister of India, revealed in January that Apple is looking to scale up production of iPhone in India and make 25% of the devices there. The official said Apple has already made about 5% to 7% of its production in India, and “If I am not mistaken, they are targeting to go up to 25% of their manufacturing. They launched their most recent models from India, manufactured in India.”  

The new plant in India could materially improve the component supply in India and probably boost the country’s share of iPhone assembly to 10-15% from a sub-5% currently, Steven Tseng and Sean Chen, Bloomberg Intelligence analysts, commented on Friday. Apple will further expand capacity so that India-made iPhones could account for 25% of worldwide production by 2025, JP Morgan Chase estimated in last September.