Foxconn Set to Assemble Apple iPads in Tamil Nadu: Major Expansion in India Manufacturing

Foxconn is considering a significant expansion in India by starting to assemble Apple’s iPads. This move will build on its current operations, which focus on making iPhones. The company may begin assembling iPads at its facility in Sriperumbudur, Tamil Nadu, showing strong confidence in India’s growing supply chain for Apple products.

Until now, Foxconn and other global manufacturers in India have only assembled Apple smartphones. “Foxconn is seriously looking to start assembling Apple iPads out of its Tamil Nadu facility,” according to a source familiar with the matter.

A second source added, “Some discussions have already happened with the government. Foxconn has had a positive experience so far and is planning to expand significantly. This includes doubling their current operations to include iPhones, iPads, and other products.”

Apple’s Diversification Plan

However, it may take longer to start assembling Apple’s Mac range of laptops due to the small production volumes.

Apple’s plan to expand its product assembly in India is part of a strategy to reduce reliance on China. Apple already moved some iPad production to Vietnam last year.

Requests for comments from Apple and Foxconn were not answered as of Thursday. Industry experts note that assembling iPads is similar to assembling smartphones, unlike laptops which require more complex facilities.

“Its (iPad) production is like a bigger iPhone,” said an industry source. “It can be assembled in India without much trouble as the contract manufacturers are already equipped for such tasks.”

Expanding Production in Vietnam

Taiwanese research firm Isaiah Research mentioned that electric car maker BYD’s facility in Vietnam began assembling iPads in the latter half of 2022. Currently, Vietnam accounts for about 5-10% of iPad assembly. Additionally, Foxconn has set up production lines in Bac Giang, Vietnam, to assemble MacBooks.

Benefits for the Indian Market

“Expanding iPad production in India is aimed at diversifying supply chain risks,” said Boyce Fan, Vice President of Research at TrendForce. “Targeting the domestic market in India is also a factor. Annual iPad shipments are expected to reach 49 million this year, a 4.5% increase from last year.”

Foxconn will benefit from India’s production-linked incentives (PLI 2.0 for IT Hardware), which include tablets, as it ramps up investments in India.

Future Plans and Investments

ET reported on June 28 that Foxconn plans to start manufacturing AI servers, the high-performance computing engines for AI models, at its Sriperumbudur plant. Additionally, Google is in advanced talks with Foxconn to manufacture Pixel smartphones at the same facility.

In February, Foxconn announced that its Indian subsidiary would spend Rs 1,200 crore to build a factory on company-owned land. A mega factory is also being built outside Bengaluru to primarily make iPhones.

Foxconn also announced a $37.2 million investment to establish a chip packaging and testing facility in India with IT major HCL Group, pending government approval.

Currently, India assembles iPhones at Completely Knocked Down (CKD) levels, but it will likely start iPad assembly at Semi-Knocked Down (SKD) levels before reaching CKD, according to an industry source. SKD refers to partially assembling products before export, while CKD involves completely disassembling products for shipping.

Customs Duty and Manufacturing Plans

Ashweej Aithal, an analyst at market research firm Canalys, noted that Apple was initially hesitant about manufacturing iPads and MacBooks in India due to previous conflicts with government restrictions on collaboration with BYD. Apple’s attempt to partner with BYD to make iPads in India faced issues due to geopolitical concerns.

“The recent reduction of the Basic Customs Duty (BCD) from 20% to 15% on components is expected to speed up domestic manufacturing plans,” Aithal said. “Foxconn is likely to start assembling iPads in the second half of next year if these plans materialize.”