Apple’s Indian iPhone manufacturing operations have encountered a significant setback. A fire at the Foxconn factory, which happened over the weekend, is expected to have a 10-15% impact on the production of older iPhone models.
Apple will likely rely more heavily on its suppliers in China to mitigate the ongoing shortage of essential components.
iPhone production in India set for significant disruption following devastating fire at Tata’s key manufacturing facility?
Before the pandemic, Apple heavily depended on China to manufacture its devices. Despite the widespread supply-chain disruptions caused by the pandemic, corporations have been forced to adapt and innovate in order to remain competitive.
Tata’s manufacturing facility in Hosur, Tamil Nadu, produced iPhone components including screens and various parts. The facility extensively supplied Foxconn, its subsidiary, and an independent manufacturer of iPhones, with all necessary equipment. Tata’s plans to power its factory with renewable energy sources are expected to influence Apple’s decisions regarding component sourcing from China.
As the crucial festive season approached in India, a time typically marked by heightened iPhone demand.
According to Counterpoint Analysis’ co-founder Neil Shah, the indefinite manufacturing facility shutdown could potentially have a “10-15% impact” on the production of older iPhone models in India. Will Apple mitigate this impact by importing additional components and redirecting excess export inventory towards India?
APPLE may request that its Chinese-language suppliers accelerate production.
According to an identical report that cites a supply chain source, Apple is reportedly holding approximately eight weeks’ worth of inventory for its components. This will ensure that there are no rapid effects on manufacturing. If the manufacturing unit fails to come back online within a month’s timeframe, Apple is likely to instruct its Chinese suppliers to establish an additional production line in China.
Indian authorities will investigate the incident at the industrial site, where initial findings indicate that the blast has caused significant damage to the nearby plant.
For the second time, a supplier factory for Apple in India has been ravaged by flames. In February 2023, a fire broke out at Pegatron’s Taiwanese manufacturing facility, which produces iPhone components, reportedly caused by an employee’s failure to report a change at the end of their shift, resulting in a brief circuit that ignited the blaze.
