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Taiwanese firm Pegatron in talks to hand over its India iPhone manufacturing facility to Tata: Report

Taiwanese electronics giant Pegatron is in advanced talks with The Tata Group to hand over the control of its only iPhone manufacturing facility in India to the Indian business conglomerate, Reuters reported on Monday.

Apple’s iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn(Reuters file)

The deal which has received the backing of iPhone creator Apple, Tata will have at least 65 per cent stake in the joint venture that will operate the Pegatron plant near Chennai. The Taiwanese firm will provide technical support and hold the remaining stake. 

Tata will operate the joint venture through its Tata Electronics Unit, the report added. With a strength of around 10,000 employees, the Pegatron factory in India makes 50 lakh iPhones annually. 

It is the last facility operated by the Taiwanese firm after it forfeited control of an iPhone plant in China last year to rival Luxshare in a $290 million deal.

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In recent times, Cupertino-based Apple has looked towards diversifying its iPhone supply chain beyond China amid Beijing’s geopolitical tensions with Washington DC. 

In India, the Chennai Pegatron plant will bolster its iPhone manufacturing plans. Tata already runs an iPhone assembly plant in Karnataka, which it took over from Taiwan’s Wistron last year, and is also building another in Hosur in Tamil Nadu, where Pegatron is likely 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 Reuters report added. 

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.

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 Reuters inputs)

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