Tata Group to Acquire Stake in Apple Partner Pegatron's India Business

By siliconindia  |  Monday, 18 November 2024, 02:47:36 PM IST

Tatas to Acquire Stake in Apple Partner Pegatron's India Operations
Tata Group is set to acquire the India operations of Apple's manufacturing partner Pegatron, nearly a year after purchasing the business of another supplier, Wistron. This deal will position Tata as one of the largest contract suppliers to the American electronics giant, alongside Taiwanese firm Foxconn.
Tata Group, which has been making inroads into the manufacturing ecosystem of Apple and has started making the latest generation of iPhone 16, will be buying around 60% in operations of Pegatron.
The diversified conglomerate is expanding into the electronics manufacturing eco-system, including making semiconductors in the country.
Questions sent to a spokesperson for Tata Sons were not answered. Apple spokesperson in India also did not respond to questions.
Sources said that talks between Pegatron and Tata Electronics, a group company of the Tata group, had been going on for the past one year as the Taiwanese supplier wanted to induct an Indian partner given the low margins of the manufacturing business and challenges in handling the workers' demand.
"Being a contract manufacturer to Apple is not an easy business, and the margins are also very tight. Companies have to ensure top-level manufacturing quality, considering the sophisticated nature of Apple's products, and there cannot be any disruptions in production as supplies are catering to global markets", a top official, who is part of Apple's manufacturing ecosystem, told TOI.
"Iissue of labour management has caused severe concerns among Apple's Taiwanese suppliers. It is a challenge to handle labour in southern India and companies are mostly on the edge in view of the recurring demands made by labour and the unions", the official said, requesting anonymity.
Wistron, which was one of the first of Apple's suppliers to begin manufacturing in India, faced violence at its factory in late 2020, which saw workers break glass panes and doors and attack the offices of senior officials.
Pegatron is believed to have contributed around 10% to iPhone's India production last year and has a factory in Tamil Nadu. Tata and Pegatron may be partners for an upcoming factory at Hosur in Tamil Nadu.
Pegatron's India facility is said to employ approximately 10,000 workers and has the capacity to produce five million iPhones annually. Through its acquisition of Wistron, Tata Group also took over an iPhone manufacturing plant in Karnataka.
With Apple focusing on India as a key manufacturing hub outside of China, Tata Group and Foxconn are expected to aggressively expand their investments. It is projected that India will contribute nearly 24% of global iPhone production this year, double the share from the previous year.
 

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