Tata, Pegatron firm up deal for iPhone plant in Tamil Nadu

NEW DELHI: Even as competition is hotting up between states to grab big ticket deals, Tamil Nadu as an investment hotspot got another shot in the arm with Tata Electronics forging a joint venture for iPhone with Taiwanese contract manufacturer Pegatron.

Tata will hold 60 per cent in the JV announced internally last week, that would strengthen the salt-to-software Tata group’s position as an Apple supplier, as per a Reuters report.

Among the key factors driving the Pegatron-Tata deal are the production linked incentive scheme, special investment package (TN Cabinet had approved a tailored package for Pegatron, which included fiscal benefits and support for infra development at their manufacturing site in Chengalpattu) and large-scale employment generation.

While Tata entity would manage the daily operations, the technical support would be provided by Pegatron, the report, citing sources, said. No financial details are known as yet.

For over six months now, negotiations have been on with Pegatron, backed by Apple, evaluating the prospect of selling its only iPhone plant in Chennai. This after the Cupertino-based iPhone company keen to diversify its supply chain beyond China owing to geopolitical tensions between the dragon nation and the US.

Tata’s latest move would fast-track its iPhone manufacturing plans, thereby intensifying the competition with contract manufacturers (read Foxconn) making the marquee brand.

The announcement for the deal’s closure was made internally at the iPhone plant on Friday, said the first source, cited by the agency report, which went on to add that Tata and Pegatron would soon be filing for the Competition Commission of India approval. The Tata-Pegatron plant will be the third iPhone unit for Tata in India, where around 10,000 employees manufacture 5 million iPhones annually.

Tata already has an iPhone assembly plant in Karnataka, post Taiwan’s Wistron takeover last year. It has been building one more in Hosur, TN. Of the total iPhone shipments this year, India’s contribution is pegged at 20 to 25 per cent, up from 12-14 per cent last year. India’s smartphone market surged 6 pc to 4.6 cr units in Q3. Apple and Samsung clocked 8.6 per cent and 12.3 per cent market share in the Sept 2024 quarter, as per IDC Worldwide Quarterly Mobile Phone Tracker for the Q3 of 2024.