Tata Group, a prominent Indian group, is in the final stages of acquiring a factory owned by a major Apple supplier, according to a report by Bloomberg. The deal, expected to be completed by August 2023, would be a significant milestone as it marks the first time an Indian company enters the domain of iPhone assembly. Tata Group aims to acquire the Wistron factory situated in the southern state of Karnataka.
With a value exceeding $600 million, the agreement follows almost a year of negotiations. The Wistron factory is known for producing the iPhone 14 model and currently employs over 10,000 workers.
According to the report, Wistron has committed to shipping iPhones worth $1.8 billion to Apple by March 2024. Apple, in turn, has pledged to triple the factory's workforce by next year. Once the deal is finalized, Tata Group is expected to honor these commitments.
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Earlier reports have indicated that Wistron decided to sell its iPhone assembly facility in India due to profitability challenges under Apple's terms. As a smaller player compared to global giants like Foxconn and Pegatron, Wistron struggled to negotiate higher margins with Apple. The company also faced difficulties in inventory management, which larger suppliers handled more effectively.
As per the reports, Wistron faced difficulties in effectively addressing these challenges due to its smaller size and management issues. Furthermore, cultural differences between China and India affected Wistron's ability to retain workers, resulting in a high attrition rate at its facility in Kolar, India.
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As part of its restructuring efforts, Wistron has chosen to sell its iPhone assembly facility to Tata Group. Tata intends to enhance the current iPhone production capacity at the Wistron factory, aligning with its strategy to focus on core operations and exit the iPhone assembly business in India. In addition, reports are stating that the Tata Group is currently testing the assembly of the upcoming iPhone 15 models in India.
Wistron initially entered the Indian market in 2008 with the establishment of a device repair facility. In 2017, the company expanded its operations and commenced manufacturing iPhones for Apple.
