Foxconn Production LineSource: Apple

What you need to know

  • Foxconn is investing $1 billion to expand its production in India.
  • The move comes from "a strong request from Apple."
  • The investment will result in 6,000 jobs over the course of three years.

Apple has been rumored to be working on moving some of its production out of China, and a new report seems to confirm that strategy.

Reported by Reuters, Foxconn, who assembles the iPhone for Apple, is planning to invest $1 billion to expand its production capabilities in India. One of the sources, who asked to remain anonymous, says that Apple has been pushing its supply chain partners to move part of their production out of China.

"There's a strong request from Apple to its clients to move part of the iPhone production out of China," one of the sources with direct knowledge of the matter told Reuters.

The expansion of the plant will take about three years and generate about 6,000 jobs, according to another source. The factory is currently used to manufacture the iPhone XR, and the expansion will increase the location's capability to manufacture additional models.

Foxconn's planned investment in the Sriperumbur plant, where Apple's iPhone XR is made some 50 km west of Chennai, will take place over the course of three years, the second source said ... Some of Apple's other iPhones models, made by Foxconn in China, will be made at the plant, said both sources, who declined to be identified as the talks are private and details have yet to be finalised ... Taipei-headquartered Foxconn will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan, one of the sources said. It also operates a separate plant in the southern Indian state of Andhra Pradesh, where it makes smartphones for China's Xiaomi Corp (1810.HK), among others."

Neil Shah of Hong Kong-based tech researcher Counterpoint says that the move will enable Apple to use India as an export hub in addition to its major presence in China.

"With India's labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub."

According to Reuters, they were unable to get a comment from Apple and Foxconn regarding the matter.