Pegatron, a contract manufacturer, is discussing selling a big part of its iPhone production unit near Chennai to Tata Group, according to sources familiar with the matter.
The deal is likely to be finalized in the next two to three months or by the second quarter of the fiscal year. It’s uncertain if this will be a complete buyout like Wistron or a partnership.
Wistron, another Taiwan-based manufacturer for Apple, was bought by Tata Group for $125 million last November, making it the first Indian company to produce iPhones.
Ashwini Vaishnaw, Minister for Electronics, IT, and Railways, praised Indian companies entering mobile manufacturing, welcoming new job opportunities.
The transaction is expected to be smaller than the Wistron deal because Pegatron is smaller and will have less time left under the production-linked incentive scheme once the deal is done.
The acquisition is likely to be done through Tata Electronics, a Tata subsidiary.
Apple may want the deal closed quickly to avoid ownership issues before its annual iPhone launch in September.
Pegatron, Tata Group, and Apple have not commented on the matter.
Pegatron, with about 9,500 employees in India, manufactures around 4.5 million iPhones annually and started operations in 2022.
It was selected under the smartphone PLI scheme but will avail benefits for only four years as it started manufacturing later than Foxconn and Wistron.
If the Tata deal goes through, Pegatron employees will join the new entity.
The potential acquisition aligns with Apple’s strategy to expand its local ecosystem.
Apple is building a strong network of Indian suppliers to shift a significant part of its production from China.
Tata Electronics is a key component supplier for Apple, producing parts for iPhones at its Hosur facility.
Apple has been focusing on India as a major market amid tensions between the US and China.
Production of iPhones in India surpassed Rs 1 lakh crore by value as of February.
All the latest Apple models have been made in India in recent years, including exports by Foxconn, Wistron, and Pegatron.
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