HNHPF - Apple manufacturing partner said to discuss building second Indian factory

2023-03-24 07:39:31 ET

As Apple ( NASDAQ: AAPL ) and its partners continue to diversify their supply chain, one of the tech giant's top manufacturing partners is reportedly discussing opening a second factory in India.

Pegatron is looking at building a second facility near Chennai, Reuters reported , citing sources familiar with the matter. Pegatron has another facility in the area at Tamil Nadu, which is responsible for producing some iPhone 14 units.

Citing one of the sources, the news outlet added the new factory near Chennai would be "to assemble the latest iPhones."

Apple ( AAPL ) shares slipped fractionally in premarket trading on Friday.

Cupertino, California-based Apple ( AAPL ) has been producing iPhone units in India since 2017, when it started with the iPhone SE.

Both Apple ( AAPL ) and its manufacturing partners have worked to move production of the tech giant's devices away from China amid the country's COVID-related lockdowns last year and increased disagreements between the U.S. and China.

Indian Prime Minister Narendra Modi has also pushed to increase local manufacturing and narrow the production gap between the world's two most populated countries.

In December, Apple ( AAPL ) reportedly discussed moving production of its popular iPad tablet to India.

Earlier this month, Apple ( AAPL ) and Foxconn, also known as Hon Hai Precision ( OTCPK:HNHPF ), reportedly successfully lobbied for more liberal labor laws in the Indian state of Karnataka.

Last year, investment firm J.P. Morgan suggested Apple ( AAPL ) could shift a quarter of its iPhone production to India by 2025 and expected 5% of its iPhone production this year to move to the country.

Investment firm KeyBanc Capital Markets recently said its proprietary data showed February spending on Apple ( AAPL ) products and services was above the three-year average .

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