 "Is Tata group buying Pegatron's only iPhone plant in India?")
In a strategic move, the Tata Group is in advanced negotiations to assume control of Pegatron’s sole iPhone manufacturing facility in India, according to two sources familiar with the matter.
This development signals Pegatron’s latest retreat from its partnership with Apple, reflecting a significant shift in its business strategy.
Under the proposed deal, which has garnered approval from Apple, Tata aims to secure a minimum 65% stake in a joint venture that will oversee the operation of Pegatron’s plant near Chennai, situated in the southern Indian state of Tamil Nadu.
Pegatron, on the other hand, is expected to provide technical support and retain the remaining stake in the joint venture, one of the sources revealed.
The conglomerate Tata, a prominent player in India’s corporate landscape, intends to manage the joint venture through its subsidiary Tata Electronics, as disclosed by the second source.
With approximately 10,000 employees, the Pegatron facility in India currently manufactures 5 million iPhones annually. This move comes after Pegatron relinquished control of its iPhone plant in China last year to Luxshare, its competitor, in a deal valued at $290 million.
Both Tata and Pegatron refrained from commenting on the ongoing negotiations, while Apple declined to provide any statement. Financial terms of the prospective agreement were not disclosed by the sources.
Apple’s decision to diversify its supply chain beyond China, amidst escalating geopolitical tensions between Beijing and Washington, underscores the strategic significance of the Chennai plant for Tata. For Tata, this partnership with Pegatron represents a significant step in bolstering its iPhone manufacturing ambitions.
Impact Shorts
More ShortsNotably, Tata already operates an iPhone assembly plant in the southern state of Karnataka, which it acquired from Wistron, a Taiwanese company, last year. Additionally, Tata is in the process of constructing another assembly plant in Hosur, Tamil Nadu, where Pegatron is anticipated to emerge as its joint venture partner.
Pegatron has for months also been building another iPhone factory at its Chennai campus, and the Tata deal talks include taking over that facility as well, the first source said.
The talks between Tata and Pegatron for the factory are expected to close in six months and will see all of the Pegatron India employees move to the joint venture entity, the first source added.
Apple’s iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is key to Apple’s growing ambitions in India, which analysts estimate will contribute 20-25% of total iPhone shipments this year, from 12-14% last year.
The reasons for Pegatron’s gradual withdrawal from its Apple business, including in India, were not known. Last year, Pegatron said the China plant deal was done to raise capital to “optimise its business”.
With inputs from Reuters
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
