Wistron’s plant in Kolar,Karnataka which was gearing up to start assembling the iconic smartphone maker’s latest series of devices, may wait to delay the production plans for Apple due to the violence and shutdown according to industry executives and analysts.

According to ET, The Wistron facility in Karnataka, which is currently in controversy, was gearing up to manufacture the Cupertino which is California-based tech giant’s latest offering. They were planning to start the production for the same in January-February, which now may get delayed.

According to analysts and staffing firms, until Apple completes an independent audit in the matter, an immediate production shift to other facilities, like that of Wistron or other component suppliers, Foxconn is not possible. This has led to huge losses.

Although Wistron rival Foxconn ramped up its production to make up for the lost time during lockdown any new contract for new devices will require months to materialise, the report added.     

 What This Means For Wistron, Pegatron & Foxconn:-

According to Neil Shah, research analyst & partner at Counterpoint Research said “This (the incident) could directly impact the iPhone 12 production timeline,” . He added, “First and foremost, we will have to see the outcome of Apple’s investigations. If it decides to blacklist Wistron, like it did with the Pegatron plant in China, then definitely Apple will cease any new business with Wistron India.”

He also added that the newest supplier to Apple from India, Pegatron, will need a year at least to start operations. However for Foxconn, if at all it decides, it will be interesting to see how quickly they can step up.

Experts said that the pros of having a local assembly for Apple in India would include almost 25% savings in import duties and taxes.

This could be a great opportunity for Foxconn to strike when the iron is hot. According to Faisal Kawoosa, chief analyst and founder of TechArc, Foxconn could use the production-linked incentive (PLI) scheme. Under this scheme, if any manufacturer fails to meet the target, a rival firm which produces over and above the targets can get extra benefits allocated to the former. So, Foxconn can move Wistron’s cheese, so to speak.

Wistron Violence & Damage

According to a  Taiwan Stock Exchange filing, Wistron revised downwards the extent of damages caused to its Kolar plant to Rs 26-52 crore. This is previously stated to be Rs 437 crore.

Wistron stated in the stock filing “The company is assessing the extent of the damages in various areas of the facility’s campus. The violence did not cause material damage to major manufacturing equipment and warehouses, with preliminary estimates of damages in the range of NTD 100 to 200 million. Wistron is working with related government authorities and police officials regarding the investigation of this incident as well as negotiating with insurance companies.”

Last week on Saturday, the Taiwanese manufacturer’s Karnataka facility witnessed a violent break out as workers went on a rampage over a dispute on wages. The workers alleged that they were not paid dues.

A total of 145 people were arrested while hundreds were detained after the incident. 

Apple has launched a detailed investigation at Wistron’s facility and is dispatching additional team members and auditors to the facility.