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Foxconn's US$31.8 million equipment buy from Apple signal major iPhone production boost in India

Ninelu Tu, Taipei; Jingyue Hsiao, DIGITIMES Asia 0

Credit: AFP

On October 24, Foxconn's Indian subsidiary, Foxconn Hon Hai Technology India Mega Development Private Limited, announced a transaction with Apple Operations Limited to acquire a batch of machinery and equipment. The total transaction amount is US$31.8045 million. Supply chain sources indicate that this acquisition is aimed at preparing for the continued expansion of production capacity in India.

According to reports, Foxconn's investment of US$31.8045 million in equipment will kickstart the production of the iPhone 16 Pro series in India. With optimism about future market growth potential, Apple places significant importance on its operations in India. To meet customer demand, Foxconn continues expanding its production capabilities in the country. It is understood that in 2024, the Indian facility achieved synchronized smartphone production with China, meaning it will no longer primarily produce previous-generation products but directly engage in the production of the iPhone 16 series.

Apple plans to establish a complete local production ecosystem in India while increasing the proportion of local manufacturing. Consequently, over the past two years, Foxconn has strategically positioned itself through various subsidiaries within the group in India.

In July 2023, Foxconn also engaged in a similar transaction with Apple Operations Limited. This recent deal is believed to be driven by the need for manufacturing equipment as local production scales up.

Industry insiders noted that the collaboration between Apple and suppliers is quite diverse. Sometimes, Apple procures specific production equipment on behalf of the suppliers, who are then responsible for manufacturing. At other times, suppliers assist in designing and producing specialized equipment needed for Apple's products, which is then provided for Apple's use. Regardless of the arrangement, supply chain operators can only use this equipment to manufacture Apple products and cannot repurpose it for other uses.

Such situations typically do not require formal transactions. However, if these pieces of equipment need to be transferred between facilities or even across countries, a transaction may be necessary to comply with relevant regulations.

As a result, following these two transactions, industry experts speculate that the equipment acquired in the July 2023 deal was likely intended to address production needs for 2024, while the current transaction prepares for further scaling up local production.