Apple is looking to increasingly diversify its supply chain outside of China amid geopolitical tensions between Beijing and Washington.
India’s Tata Electronics has agreed to buy a majority stake in Taiwanese contract manufacturer Pegatron’s sole iPhone plant in India, forming a new joint venture that strengthens Tata’s position as an Apple supplier, two sources told Reuters.
Under the deal, announced internally last week, Tata will hold a 60% stake and run day-to-day operations under the joint venture, while Pegatron will hold the remaining stake and provide technical support, said two of the sources, who declined to be named as the details were still pending. not yet public. .
The sources did not elaborate on the financials of the deal.
Tata declined to comment, while Apple and Pegatron did not respond to questions from Reuters on Sunday.
Reuters first reported in April that Pegatron has the backing of Apple and is in advanced talks to sell its sole iPhone plant in India to Tata, marking the Taiwanese firm’s latest scale-up of its Apple partnership.
Apple is looking to increasingly diversify its supply chain outside of China amid geopolitical tensions between Beijing and Washington. For India’s Tata, the Chennai Pegatron plant will boost its iPhone production plans.
Tata is one of the largest companies in India and is rapidly expanding into iPhone manufacturing, rivaling Foxconn, the only iPhone contract manufacturer operating in India.
The closing of the deal was announced internally at the iPhone plant on Friday, the first source said.
Both companies plan to file for Competition Commission of India (CCI) approval in the coming days, another source said.
Tata already operates an iPhone assembly plant in the southern state of Karnataka, which it took over from Taiwan’s Wistron last year. It is also building another in Hosur, Tamil Nadu, where it also has an iPhone component plant that was involved in a fire in September.
Analysts estimate that India will contribute 20-25% of total iPhone shipments this year, up from 12-14% last year.
The Tata-Pegatron plant, which has around 10,000 employees and makes 5 million iPhones annually, will be Tata’s third iPhone factory in India.