In a transaction that would create the nation’s first indigenous iPhone manufacturer, Tata Group is close to acquiring a significant facility in southern India.
According to two people familiar with the situation, the airline-to-software conglomerate has been in talks with Taiwan’s Wistron Corp, the owner of the factory, for months and hopes to close the deal by the end of March. The two companies considered a number of possible alliances, but discussions are currently focused on Tata owning the majority of a joint venture, sources claim. They said that Tata is going to be in charge of managing the primary manufacturing operation with assistance from Wistron.
The majority of Taiwanese manufacturing behemoths like Wistron and Foxconn Technology Group assemble Apple Inc.’s iPhones. Tata’s transaction would boost India’s initiatives to develop domestic rivals to China’s dominance in the electronics industry, which has been threatened by political tensions with the US and obstacles relating to Covid.
According to one of the sources, the Indian conglomerate hopes to wrap up its due diligence procedure by March 31 so that its Tata Electronics division may formally take over Wistron’s role in a government incentive program. The new incentive cycle will commence on April 1, which also happens to be the start of the Indian fiscal year.
If the Taiwanese company passes the requirements to get the anticipated incentives for the current financial year, the deal may be worth more than $600 million for Wistron’s sole iPhone production facility in India, according to one of the people.
Along with Foxconn and Pegatron Corp., Wistron is one of three Taiwanese iPhone manufacturers in India. It agreed to sell its iPhone production operation in China to a rival in 2020 in an effort to expand its business beyond low-margin iPhone manufacture into sectors like servers.
However, although Wistron intends to stop producing iPhones in India, its rivals in Taiwan are increasing the number of iPhone production lines. Apple, the most profitable smartphone manufacturer in the world, is attempting to lessen its reliance on China, where supply chain bottlenecks brought on by the epidemic and tough regulations have had a disastrous impact on device production.
Over 50 kilometers to the east of Bangalore is where the 2.2 million square foot Wistron facility is situated. If the deal is approved, Tata will acquire all eight of the iPhone lines from Apple as well as the 10,000 employees—including a few thousand engineers—who work at the plant. In India, Wistron would continue to be an iPhone service provider.
Tata has made additional efforts to grow its relationship with Apple. In its factory in Hosur, close to Bangalore, where it makes iPhone components, it has expedited hiring. On a few hundred acres surrounding the facility, Tata may eventually build production lines for the iPhone. The first of 100 Apple stores that Tata has promised to open in the 1.4 billion-person nation will debut in Mumbai this quarter.
The 150-year-old Tata Group owns a national airline and Starbucks coffee shops in addition to producing everything from branded salt and Tetley Tea to steel and Jaguar vehicles. Tata Consultancy Services Ltd. is one of India’s most valuable companies by market value and the largest IT outsourcing firm in Asia.
With a number of e-commerce projects and a brand-new super-app called Tata Neu over the past two years, Chairman Natarajan Chandrasekaran has increased efforts to make the company more technologically oriented. Chandrasekaran stated last year that the group also planned to enter the chipmaking industry.
Tata Group
Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise headquartered in India. The group operates in more than 100 countries across six continents with a mission ‘To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust.’
Sixty-six percent of the equity of Tata Sons, the promoter holding company, is held by philanthropic trusts, thereby returning wealth to society. The Tata name has been respected in India for 150 years for its adherence to strong values and business ethics.
Wistron Corporation
Wistron Corporation is an ODM (original design manufacturer) providing a variety of support services related to design, manufacturing, and after-sales service for information and communication technology (ICT) products. Wistron’s client base consists of branded, global/regional-based OEM (original equipment manufacturer) companies.
