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Tata Group is close to acquiring a big plant in southern India, creating the country’s first domestic iPhone manufacturer.
According to two people familiar with the situation, the airline-to-software conglomerate has been in talks with the factory’s owner, Taiwan’s Wistron Corp., for months and hopes to complete the deal by the end of March. According to the persons, the two companies discussed different prospective collaborations, but discussions have now focussed on Tata taking a majority stake in a joint venture. The main manufacturing operation will be overseen by Tata, with backing from Wistron, according to the people, who asked not to be identified since the plans aren’t public.
Apple Inc.’s iPhones are mostly built by Taiwanese manufacturing behemoths such as Wistron and Foxconn Technology Group. Tata’s transaction would help India’s ambitions to build domestic competitors to challenge China’s supremacy in electronics, which has been hampered by political tensions with the US and Covid-related obstacles.
According to one of the people, the Indian conglomerate plans to finish a due diligence procedure by March 31 so that its Tata Electronics branch may formally take over Wistron’s role in a government-subsidised programme. The next cycle of incentives will begin on April 1, the start of India’s fiscal year.
According to one of the people, the acquisition might be worth more than $600 million if Wistron achieves the conditions for the projected incentives for the current fiscal year.
A Tata spokesman declined to comment. Wistron and Apple did not reply to calls for comment.
Wistron, along with Foxconn and Pegatron Corp, is one of three Taiwanese iPhone producers in India. It has attempted to expand its business beyond low-margin iPhone manufacturing into areas such as servers, promising to sell its iPhone production operation in China to a competitor in 2020.
Even as Wistron prepares to abandon iPhone production in India, its Taiwanese competitors are increasing their iPhone production lines. Apple, the world’s most profitable smartphone maker, is attempting to minimise its reliance on China, where pandemic-related supply chain snarls and severe controls have wreaked havoc on device production.
Wistron’s 2.2 million square-foot facility is around 30 miles (50 kilometres) east of Bangalore. If the deal goes through, Tata will take over all eight iPhone lines as well as the plant’s 10,000 employees, including a couple thousand engineers. Wistron will continue to be an iPhone service partner in India.
Tata has taken additional steps to expand its relationship with Apple. It has increased hiring at its factory in Hosur, near Bangalore, where it manufactures iPhone components. This factory is located on several hundred acres of land where Tata may expand iPhone assembly lines in the coming years. Tata has also stated that it will open 100 Apple stores in the country of 1.4 billion people, the first of which will open in Mumbai this quarter.
The 150-year-old Tata Group manufactures everything from branded salt and Tetley Tea to steel and Jaguar vehicles, as well as operating an airline and Starbucks cafés in the country. Tata Consultancy Services Ltd. is Asia’s largest IT outsourcing company and one of India’s most valued by market capitalization.
In recent years, Chairman Natarajan Chandrasekaran has increased attempts to make the conglomerate more tech-centric, with a spate of e-commerce activities and a new super-app dubbed Tata Neu. According to Chandrasekaran, the group is also planning to enter the chipmaking business.