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Apple supplier Foxconn plans $200m factory in India, sources say

Bron says the Taiwanese company will invest more than $200 million in the new AirPod factory in the South Indian state of Telangana.

Taiwanese contract manufacturer Foxconn has won an order to make AirPods for Apple and plans to build a factory in India to produce the wireless earphones, two people with direct knowledge of the matter told Reuters news agency.

The deal sees Foxconn, the world’s largest contract electronics manufacturer and assembler of about 70 percent of all iPhones, become an AirPod supplier for the first time and underscores the main Apple supplier’s efforts to further diversify manufacturing outside of China. AirPods are currently made by a range of Chinese suppliers.

A source said Foxconn will invest more than $200 million in the new Indian AirPod factory in the south Indian state of Telangana. It wasn’t immediately clear how much the AirPod order would be worth.

The person, who asked for anonymity because the matter was not yet public, said Foxconn officials had spent months internally debating whether or not to assemble AirPods due to relatively lower profit margins in making the device, but ultimately chose to go through with it. going with the deal to get “involvement” with Apple.

“That way we’re more likely to get orders for their new products,” the person said.

The decision to set up production in India was at Apple’s request, according to the source.

Foxconn is vying with Taiwanese rivals such as Wistron Corp and Pegatron Corp to win more orders from Apple, the world’s most valuable company.

A subsidiary, Foxconn Interconnect Technology, plans to begin construction of a production facility in Telangana in the second half of this year and begin production as early as late 2024, the person said.

A second person with direct knowledge of the matter, who also declined to be identified because it was not yet public, said the Foxconn subsidiary would make AirPods in India without providing further details.

Analysts have previously said that Apple has asked suppliers, including Foxconn, to make AirPods in India, but details such as the size of the investment, timeline and which suppliers have production plans in the country have not been disclosed.

Foxconn declined to comment. Apple did not immediately respond to a request for comment.

Apple and its key suppliers have moved production from China, where strict COVID-19 restrictions disrupted Foxconn’s largest iPhone factory last year. They also try to prevent companies from taking a potential blow from rising Sino-US trade friction.

Foxconn said Wednesday it would ramp up investment outside of China to meet customer demand and reduce reliance on China for manufacturing.

It was not immediately clear whether Foxconn’s production plan would affect current AirPod suppliers, including Luxshare Precision Industry.

Luxshare did not immediately respond to a request for comment.

Goertek, another supplier, said in November that a foreign customer had asked it to suspend assembly of a smart acoustic product, which analysts identified at the time as AirPods Pro 2, and that the suspension could hurt sales by up to 3.3 billion yuan. ($480 million).

Goertek did not respond to a request for comment.