Apple Inc. partner Foxconn Technology Group plans to invest about $700 million on a new plant in India to ramp up local production, people familiar with the matter said, underscoring an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.
The investment is one of Foxconn’s biggest single outlays to date in India and underscores how China’s at risk of losing its status as the world’s largest producer of consumer electronics. Apple and other US brands are leaning on their Chinese-based suppliers to explore alternative locations such as India and Vietnam. It’s a rethink of the global supply chain that’s accelerated during the pandemic and the war in Ukraine and could reshape the way global electronics are made.
The new production site in India is expected to create about 100,000 jobs, the people said. The company’s sprawling iPhone assembly complex in the Chinese city of Zhengzhou employs some 200,000 at the moment, although that number surges during the peak production season.
Output at the Zhengzhou plant plunged ahead of the year-end holidays due to Covid-related disruptions, spurring Apple to re-examine its China-reliant supply chain. Foxconn’s decision is the latest move that suggests suppliers may move capacity out of China far faster than expected.
The plans could still change as Foxconn is in the process of finalizing investment and project details, the people said. It’s also unclear if the plant represents new capacity or production that Foxconn is shifting from other sites such as its Chinese facilities.
Apple declined to comment. Hon Hai, whose Chairman Young Liu met India’s Prime Minister Narendra Modi this week, did not immediately respond to an email seeking comment. The Karnataka state government also did not immediately respond. Liu, who is on tour in India, has committed to another manufacturing project in the neighboring Telangana state.
Foxconn’s decision would be a coup for Modi’s government, which sees an opportunity to close India’s tech gap with China as Western investors and corporations sour on Beijing’s crackdowns on the private sector.