Top Apple Supplier Plans Major India Expansion

Foxconn is set to expand production of iPhones at its existing plant near Chennai, in the southern Indian state of Tamil Nadu, people familiar with the matter said. It aims to boost iPhone production to around 20 million units annually by 2024, and roughly triple the number of workers to as many as 100,000, said the people, including a senior Indian government official.

Foxconn also plans to build a new production facility in the southern Karnataka state, where it would make products including iPhones, people familiar with the matter said.

In addition, Foxconn is considering building a new production site in the southern city of Hyderabad as well as a silicon carbide fabrication plant and packaging facility in India for its semiconductor business, some of the people said.

Foxconn’s expansion plans are under consideration and could change.

Foxconn chairman Young Liu visited both Bengaluru, in Karnataka state, and Hyderabad during a visit to India this week, while he also met with Prime Minister Narendra Modi in New Delhi. The Modi government has introduced billions of dollars of incentives in recent years to lure global manufacturers to India, as part of a major push to boost advanced manufacturing jobs and decrease reliance on electronics imports.

Apple has been pushing suppliers to diversify beyond China after many of them faced production disruptions in China multiple times during Covid-19 lockdowns. Meanwhile, geopolitical tensions have been growing between the U.S. and China, as well as between Beijing and Taiwan, where Foxconn is based. Beijing considers Taiwan, a democratically ruled island near mainland China, as part of its territory.

China has been the biggest manufacturing hub in the electronics supply chain for years, with Apple a major driver after building much of its supply chain and assembly in the country over the past two decades.

Concerns over that reliance heightened after protests erupted at the world’s biggest iPhone production site in Zhengzhou, central China, late last year as frustration grew among workers over tight pandemic control policies and wages.

Still, expanding into India won’t mean companies like Apple and Foxconn leaving China, supply chain executives say. The supply chain infrastructure that these companies have built over the past decades there can’t be easily replaced by other countries, they say. China also has a big workforce and experience in manufacturing.

Despite strides in local automobile and smartphone production in recent years, India has long trailed regional rivals in advanced manufacturing due to concerns over the country’s challenging bureaucracy, protectionist rules and underdeveloped infrastructure.

A spokesman for Foxconn, formally known as Hon Hai Precision Industry Co., declined to comment on the plan, and said the company doesn’t comment about specific customers or products. Apple didn’t respond immediately to a request for comment.

Bloomberg earlier reported on Foxconn’s expansion plan in Karnataka.

Mr. Liu’s India visit came just days after he was in Zhengzhou visiting Foxconn’s iPhone production campus and meeting workers there, as well as meeting senior local officials.

India, alongside Vietnam, has already been identified by Apple as a prime destination with the Cupertino-based company seeking to diversify the sites where its products are assembled. Apple has told its suppliers to plan more actively for assembling its products beyond China and elsewhere in Asia, particularly India and Vietnam, The Wall Street Journal has reported.

Taiwan-based contract manufacturers including Foxconn and Wistron Corp. have in recent years set up factories in India to produce iPhones mainly for the country’s domestic market.

Apple has also worked with contract manufacturers in India to speed up the production process to shorten the typical delay between when the devices are made in China and when they are produced in India, the Journal has reported.

—Selina Cheng contributed to this article.

Write to Rajesh Roy at rajesh.roy@wsj.com, Yoko Kubota at yoko.kubota@wsj.com and Philip Wen at philip.wen@wsj.com