Tata Plans to Go Beyond iPhone Supplier Role, Will It Become India's Foxconn?

Tata Electronics, a greenfield venture of the Tata group, plans to broaden its client base beyond Apple. Currently, the company is in discussions with major companies, including Microsoft, Dell, and HP, to add them to its clientele list, according to a report by The Economic Times.

This move will expand Tata Electronics' portfolio beyond just being an Apple supplier and help it become India's Foxconn, a Taiwanese contract manufacturing giant.

"The plan was always to be an integrated EMS (electronics manufacturing services) player and so this was a natural progression - to service multiple clients. Being able to service Apple has led to a lot of inbound interest from other companies," a source told ET.

The source also informed that good discussions are going on with Microsoft, Dell, HP and a number of others - both for assembly and component supply.

The report stated that the company has ambitious plans to be an Indian EMS player that can compete on the global stage with multiple clients. Experts also predicted that Tata's established supply chain would help global companies in reducing risk and diversifying sourcing options.

Tata's Foxconn Pattern

Apple’s iPhone manufacturers in India include Tata, Pegatron and Foxconn.

It was reported last month that the homegrown EMS player was set to acquire a 60 per cent majority stake in Taiwanese contract manufacturer Pegatron's iPhone plant in Tamil Nadu.

As per Reuters, Pegatron was in talks with Tata Group earlier this year to sell its sole India-based iPhone manufacturing plant near Chennai. This was with an aim to strengthen its position as an Apple supplier in its India chain, forming a joint venture (JV). This particular factory boasts around 10,000 employees and manufactures 5 million iPhones per annum. Last year, Pegatron's contribution to India's iPhone manufacturing was around 10 per cent.

Last year, Tata Group took over the iPhone assembly facility from Wistron. It is also planning to add a new facility in Hosur, Tamil Nadu, with Pegatron as it JV partner.

Meanwhile, in August, Foxconn chairman Young Liu revealed that its business in India has grown to over $10 billion till 2024. So far the company has invested $1.4 billion in India.

Liu also stated that after visiting Indian states, he believed that the country is ascending and his company would be interested in furthering their business here. He also held a meeting with Prime Minister Narendra Modi and discussed Foxconn's investments in Tamil Nadu, Karnataka and Telangana.

Notably, Liu was conferred Padma Bhushan, the third-highest civilian award, on the eve of the 75th Republic Day this year.

With three manufacturing facilities, Tata Group is set to become Apple's one of the key suppliers and it is also challenging established players like Foxconn.

India is projected to contribute 20-25% of total iPhone shipments this year, from 12-14% last year.