Foxconn plans $200m India facility, sources say 2023

Foxconn, a Taiwanese contract manufacturer, has received an order to construct AirPods for Apple and wants to build a plant in India to produce the wireless headphones, according to two individuals with direct knowledge of the situation who spoke with Reuters.

Foxconn, the world’s largest contract electronics manufacturer and assembler of about 70 percent of all iPhones, will become an AirPod supplier for the first time, highlighting Apple’s efforts to diversify production away from China. AirPods are now manufactured by a variety of Chinese manufacturers.

According to a source, Foxconn would invest more than $200 million in the new India AirPod facility in the state of Telangana in southern India. It was unclear at first how much the AirPod order would cost.

The person, who requested anonymity because the matter was not yet public, stated that Foxconn officials had debated internally for months over whether to assemble AirPods due to relatively lower profit margins on making the device, but ultimately decided to “reinforce engagement” with Apple by moving forward with the deal.

So, we are more likely to receive orders for their new items, the individual explained.

Apple sought the establishment of production in India, according to the source.

Foxconn competes with Taiwanese competitors Wistron Corp and Pegatron Corp for orders from Apple, the most valuable corporation in the world.

A subsidiary, Foxconn Interconnect Technologies, expects to begin building of a manufacturing plant in Telangana in the second half of this year, with production beginning at the earliest by the end of 2024, according to the source.

A second individual with firsthand knowledge of the subject, who also declined to be identified since the information was not yet public, stated that the Foxconn subsidiary will manufacture AirPods in India without offering any other information.

Analysts have previously reported that Apple has requested suppliers, including Foxconn, to manufacture AirPods in India. But, information regarding the quantity of Apple’s investment, the timing, and which suppliers have production plans in India have not been released.

Foxconn declined to comment. Apple did not reply to a request for comment immediately.

Apple and its main suppliers have shifted manufacturing away from China, where last year severe COVID-19 restrictions damaged Foxconn’s largest iPhone facility. They are also attempting to prevent a potential commercial impact from escalating Sino-American trade tensions.

Foxconn announced on Wednesday that it will increase investment outside of China to fulfill customer demand and reduce its production dependency on China.

It was initially unclear whether Foxconn’s production strategy would impact current AirPod suppliers, such as Luxshare Precision Industries.

Luxshare did not respond to a request for comment immediately.

Another supplier, Goertek, said in November that an overseas client had ordered it to cease assembly work for a smart acoustic device, which analysts at the time identified as AirPods Pro 2, and that the delay might reduce revenue by as much as $480 million.

Goertek declined to comment in response to a request.

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