In a strategic move, Foxconn Technology Group, the principal supplier for Apple Inc., is gearing up to escalate its investments to an impressive sum exceeding $1.2 billion in the southern Indian state of Karnataka. This expansion initiative includes the establishment of two new component factories, marking a deliberate shift away from China to safeguard against potential risks associated with US economic and technology sanctions.

Insiders familiar with the matter reveal that, of the two factories planned for construction in Karnataka, at least one is earmarked for the production of crucial Apple components, including those integral to iPhones. While an official announcement is anticipated early this week, those privy to the information prefer to remain unnamed given the confidential nature of the matter. The precise location of the second plant within Karnataka is yet to be finalized.

Foxconn’s financial commitment includes a substantial $500 million investment in these two complexes, supplementing an existing plan to construct a $700 million facility on a sprawling 300-acre site in close proximity to the Bengaluru airport, Karnataka’s capital. This facility is poised to specialize in the assembly of iPhones and is expected to generate a staggering 100,000 job opportunities.

These additional sites represent a considerable increase in the envisioned spending for India by Foxconn, a noteworthy deviation for a Taiwanese company that conventionally concentrates its device assembly efforts in central and southern China for Apple and other prominent US brands.

Foxconn’s strategic maneuvers in India underscore the nation’s rapid emergence as a favored destination for manufacturers seeking alternatives to China, particularly in the context of escalating tensions between Washington and Beijing. This shift is not only a response to geopolitical uncertainties but also a consequence of the reconfiguration of the global supply chain, a transformation catalyzed by the Covid-19 pandemic and the conflict in Ukraine. It has the potential to redefine the landscape of electronics manufacturing.

Despite these significant developments, Apple, Foxconn, and the Karnataka state government have maintained a conspicuous silence, refraining from commenting on the matter during non-business hours.

Over the past few years, Apple suppliers such as Foxconn have significantly expanded their operations in India, buoyed by Prime Minister Narendra Modi’s incentivization of local manufacturing. Foxconn, along with its Taiwanese counterpart Pegatron Corp., currently operates iPhone assembly facilities in the southern state of Tamil Nadu. The states, including Karnataka, have actively courted companies through streamlined decision-making processes, reduced bureaucratic hurdles, and enticing subsidies.

In a separate agreement, a Foxconn subsidiary has inked an initial deal with the Tamil Nadu government to establish its components plant, injecting an investment of 16 billion rupees ($195 million). According to the state’s industries ministry, this venture is expected to generate around 6,000 jobs.

Foxconn’s decision to diversify its manufacturing capacity outside of China signifies a potentially accelerated exodus, a move that aligns with the aspirations of Prime Minister Modi’s government. This development is viewed as an opportunity to bridge India’s technological gap with China, particularly as Western investors and corporations reassess their engagements with China due to regulatory uncertainties, economic deceleration, and US-imposed trade restrictions.

The sprawling iPhone assembly complex in Zhengzhou, China, currently the primary source of Apple’s flagship device globally, employs a substantial workforce, surging to approximately 200,000 during peak production seasons. However, disruptions at the Zhengzhou plant ahead of the year-end 2022 holidays, attributed to Covid-related challenges, prompted Apple to reevaluate its reliance on China for its supply chain needs.

All the information provided above is not written by Escape Title; it is sourced from various reputable outlets. Foundr Magazine.