Apple strengthens iPhone manufacturing in India with new machinery investments
What's the story
Apple is fast-tracking its supply chain expansion in India, not just by sourcing components for iPhones but also by manufacturing the machinery needed to produce these devices locally. According to Moneycontrol, around 35 companies are currently engaged in this machinery production in India. Of these, nearly half have started working directly with Apple over the past two years.
Localization efforts
Increasing local content in India-made iPhones
Apple is working to increase the local content in its India-made iPhones, with a goal of matching Chinese production levels within two to three years. Major players such as Titan Engineering and Automation Ltd (TEAL), Jyoti CNC Automation, Bharat Forge, and Wipro are already supplying capital equipment to Apple. Smaller non-Chinese firms that have set up operations in India are also contributing to this effort.
Growth plans
Expanding partner network in India
Apple plans to significantly expand its network of partners in India over the next two to three years. The company is working with these firms to mitigate logistical risks, cut operational costs, and build a more resilient supply chain. This includes localizing the manufacturing of different types of machines used after surface mount technology (SMT) line production, which directly mounts components onto printed circuit boards.
Equipment miniaturization
Miniaturizing capital equipment for electronics
Apple's partners are also helping to miniaturize capital equipment for electronics, especially smartphones. This is being done with Apple's intellectual property and know-how. The move comes as China restricts the supply of such equipment to India, especially to Apple suppliers like Foxconn, Tata Electronics, and Jabil. India still heavily relies on Chinese machinery that requires on-site support from Chinese experts.
Joint ventures
Joint ventures for critical components production
Apple is also exploring joint ventures with Chinese, South Korean, Taiwanese, and Japanese companies for the local production of critical components such as displays and camera modules. The company currently has 35-40 companies supplying components, including smaller assembly players. Some of these include Flex Limited, Foxlink, Jabil Incorporated, Molex Incorporated, Shenzhen YUTO Packaging Technology, Tata Electronics, Motherson Group, 3M, Shenzhen Everwin Precision Technology, and Taiwan Surface Mounting Technology Corporation.
Domestic value
Government aims to boost domestic value addition to match China
Apple's vendors have crossed 20% domestic value addition in India, but the government is pushing them and the broader electronics industry to raise it to 30-40%. This is to match China's current domestic value addition. India's current domestic value addition is concentrated in self-assembly items such as batteries, cells, chargers, mechanicals, packaging, boxes, and cables.