Tata to acquire Pegatron’s iPhone factory in India – all the details you need to know

Taiwanese manufacturer Pegatron is reportedly in advanced talks to transfer control of its sole iPhone production plant in India to the Tata Group. According to people familiar with the matter, this marks the latest move by Pegatron to reduce cooperation with Apple. Under the proposed deal, which is said to have been approved by Apple, the Tata Group is expected to hold at least 65% in a joint venture that will oversee operations of the Pegatron plant near Chennai. Pegatron will provide technical support and retain the remaining equity.

Pegatron has 10,000 employees

The joint venture will be run by Tata Electronics, part of India’s conglomerate Tata Group. The Pegatron factory in India currently has about 10,000 employees and produces about 5 million iPhones every year. The factory is the last remaining iPhone production base after Pegatron sold a similar factory in China to Luxshare Precision for $290 million last year.

Financial details of the ongoing negotiations have not been disclosed, and Tata, Pegatron and Apple did not comment on the matter. The development is in line with Apple’s broader strategy to diversify its supply chain outside of China amid geopolitical tensions between the United States and China. For Tata, the acquisition of the Pegatron factory will significantly enhance its iPhone manufacturing capabilities in India.

Tata already operates an iPhone assembly plant in Karnataka (acquired from Wistron last year) and is building another plant in Hosur, Tamil Nadu. A potential tie-up with Pegatron could further strengthen Tata’s presence in India’s iPhone manufacturing space.

Negotiations also reportedly involve acquiring another iPhone factory being built by Pegatron at its campus in Chennai. Negotiations are expected to be concluded within six months and all Pegatron India employees will be transferred to the new joint venture.

Analysts expect Tata’s involvement to help support Apple’s ambitions in the Indian market, which is expected to account for 20-25% of total iPhone shipments this year, up from 12-14% last year. The reasons for Pegatron’s gradual withdrawal from Apple operations, including its India operations, have not been disclosed. Last year, Pegatron cited raising funds for “business optimization” as a reason for selling its factory in China.