Taiwan's Tata Group And Pegatron Prepare To Build IPhone Assembly Factory In Tamil Nadu

Tata Group wants to build a second iPhone factory. (photo: x @tatargroup)

JAKARTA - The Tata Group is in further talks with Taiwan's Pegatron, Thursday, February 1, to form a partnership to operate the iPhone assembly plant being built by the Indian company in the city of Hosur, the southern state of Tamil Nadu.

Tata is building an iPhone assembly plant in the city of Hosur, which will be their second facility in the country. The move comes in line with Apple and its contract manufacturers expanding their operations in India.

Tata is in talks to establish a joint venture with Pegatron for factories in Hosur - their first initiative in this regard - which is expected to help accelerate their plans to start production, according to the source who did not wish to be named because the talks were private and the deal had not been closed.

The Taiwanese company will provide technical and engineering support at the plant, the source added.

Pegatron itself did not want to respond to the request for the report. Likewise, Tata and Apple have not immediately responded.

Tata's success is critical to Apple's ambitions. The US company has diversified outside China following COVID-19 disruptions and geopolitical tensions, and the proportion of iPhones produced in India is expected to reach 20-25% this year, from 12-14% by 2023, according to Apple analyst Ming-Chi Kuo.

Tata's new factory with Pegatron is expected to have 20 lines for the assembly of the iPhone, said one of the sources. He added that the Indian company will hold the majority of shares in the joint venture.

"Tata cannot build everything from scratch," said the source, explaining the reasons behind the partnership. Tata's first iPhone assembly plant was in the southern state of Karnataka which was taken over from Taiwan's Wistron last year.

Independently, Pegatron has operated an iPhone assembly plant in Tamil Nadu and is in talks to add a second facility. They currently account for about 10% of Apple's iPhone production in India, where Taiwan's Foxconn account for most of the rest.