Latest development indicates that Cupertino based Apple Inc is facing challenges while trying to increase production in India, according to a media report.
Apple Facing Challenges
It appears that Apple Inc is facing challenges as it tries to increase production in India, citing the people familiar with the iPhone maker’s operations.
As we know, the Cupertino, California-based company has been shifting production away from China.
The move took momentum after the country’s strict COVID-related restrictions dented supply chains across industries and as trade and geopolitical tensions between Beijing and Washington escalated.
There was an instance where only about half of the components from the production line were in good enough shape to be sent to Apple’s supplier Foxconn at a casings factory in southern India run by conglomerate Tata Group, according to the sources.
As expected, this 50% ‘yield’ does not meet Apple’s goal for zero defects, reportedly.
Slow Process Of Expansion
Further, the company reported that their process of expanding in India has been slow in part due to challenges in logistics, tariffs and infrastructure.
At the time of writing of this article, Apple and Tata Group did not respond to a request for comment.
Earlier, Apple has bet big on India since it began iPhone assembly in the country in 2017 through Wistron Corp and later Foxconn.
The move was also in line with the Indian government’s push for local manufacturing.
In another development, India’s trade minister said that Apple wants India to account for up to 25% of its production from about 5 – 7% currently, last month.
On Monday, Apple supplier Salcomp said that it is planning to more than double its workforce in India to nearly 25,000 over the next three years.
“China Plus One strategy is at its peak at this moment … The whole supply chain is now kind of looking at an alternative. And India is poised to be one of the best alternatives,” said Sasikumar Gendham, the managing director, Salcomp Manufacturing India in a statement.
Further adding, “It’s time to really diversify and decluster the supply chain beyond China,”.
Here, Salcomp is a major supplier of chargers to Apple.
Presently, Salcomp employs about 12,000 people in Chennai with 85% of them being women.
The company reached an agreement in 2019 to take over a facility which was formerly owned by Finnish telecom equipment maker Nokia, in the southern Indian city of Chennai and started operations in 2020.
Presently, iPhones are assembled in India by at least three of Apple’s global suppliers including Foxconn and Pegatron in Tamil Nadu; and Wistron in nearby Karnataka state.
