Foxconn looks to set up new Tamil Nadu unit to make iPhone enclosures

Time of India

4 hours ago

Taiwan's
Foxconn
is eyeing manufacturing
iPhone enclosures
in India and is looking at setting up a new unit within the ESR Industrial Park at Oragadam in
Tamil Nadu
for this purpose, people aware of the developments told ET.
This would mark the Taiwanese contract manufacturer's foray into making enclosures in India, something that only Tata Electronics has been doing so far locally. Until now, Foxconn has focused on
iPhone
assemblies in India, harnessing its Sriperumbudur facility.
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However, the company is rapidly expanding the scope of work through its upcoming plant in Devanahalli, near Bengaluru. In addition to iPhone assembly, Foxconn also has a new unit in Hyderabad that is assembling AirPods.
"Foxconn plans to start making enclosures in Tamil Nadu as they deepen their footprint in the country," one person cited above said. "Construction has begun for their enclosures unit at the industrial park. This will be a separate unit close to their upcoming display module assembly plant which is in advanced stages in the same industrial park."
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Analysts said Foxconn's entry into this space shows that
Apple
is looking to diversify its suppliers in India, much like in China where it has multiple vendors for different components.
"This aligns well with Apple's broader strategy to derisk and diversify its supply chain," said Prabhu Ram, vice president, industry research group, CyberMedia Research. "As India emerges as a lynchpin in Apple's growth momentum — with early signs of an end-to-end manufacturing ecosystem taking shape — it is a natural progression for Foxconn to expand its capabilities and geographic presence by manufacturing enclosures."
Queries sent to Foxconn and Apple remained unanswered as of press time Thursday.
Sourcing depth
Neil Shah, vice president, Counterpoint Research, also said Apple globally sources enclosures from multiple players and Foxconn is one of them. Hence, it was natural for Foxconn to diversify the production in India, Shah said.
"This gives Apple more leverage and also provides Foxconn with ease of integration and boosts value addition," he said. "This improves supply chain effectiveness for Foxconn as well as Apple."
He added that it was difficult to quantify value addition individually but for Apple specifically, Foxconn's value addition would be under 10%. Further, he said enclosures constitute a small percentage of Apple's Bill of Materials (BoM), roughly about 2–3%.
So Foxconn's foray into enclosures will not significantly add to their value addition in percentage terms. It is, however, a significant move as Apple gradually increases its manufacturing presence in India.
ET was the first to report
on September 25 last year that Foxconn was looking to set up an assembly unit for smartphone display modules in Tamil Nadu, making it the first such facility catering to Apple. Later, on October 8, the Tamil Nadu cabinet cleared a Rs 13,180 crore investment by Yuzhan Technology (India), which is a unit of Foxconn.
Sources had said at the time that Foxconn had picked up about 500,000 square feet at a plug and play facility at the ESR Oragadam Industrial & Logistics Park, which is right next to their smartphone assembly unit near Chennai.
They added that the maker of the iconic iPhone is leaning in for a model wherein even other contract manufacturers — Pegatron or Tata Electronics, for instance — can use components from this unit rather than import modules that are assembled in China.
On May 19, Foxconn said it was investing an additional $1.5 billion (about Rs 12,800 crore) in this unit via a London Stock Exchange filing.
All of this expansion news comes on the back of Apple CEO Tim Cook's recent statements that India will become the primary manufacturing hub for iPhones sold in the US.
"For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin," Cook said during Apple's Q1 earnings call on May 1.
Tariff tribulations
US President Donald Trump, however, has not taken kindly to Apple expanding its presence in the country and even threatened to have the company pay a 25% tariff if phones sold in the US were not made in the US on May 23. This tariff threat came a week after he said he had told Apple CEO Tim Cook not to build in India.
"I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a tariff of at least 25% must be paid by Apple to the US,' Trump wrote in a post on Truth Social.
Foxconn plans for expansion, however, continue.
The company has a huge factory coming up in Bengaluru and has a new unit in Hyderabad that is targeting AirPods — showing that the company is broadening its portfolio and venturing into other areas of production in India.
ET had reported on March 30 that Foxconn is targeting producing 25-30 million iPhones out of their India facilities, which is more than double their production number from last year, as per sources.