Foxconn Wins Apple AirPod Order, Plans $200 mn Factory in India

Taiwanese electronics manufacturing company Foxconn, that assembles around 70 per cent of the iPhones in the world, has won an order to make AirPods for Apple Inc, and is planning to build a factory in India's Telangana, reported Reuters quoting two people with direct knowledge of the matter.

The deal has landmarks -- Foxconn becoming an AirPod supplier for the first time; the Apple supplier deciding to diversify its production in India, away from China. AirPods are currently made by a range of Chinese suppliers, and as per the report, Apple had requested Foxconn to set up production in India.

One of the sources quoted by Reuters has said that Foxconn will invest more than $200 million in the new India AirPod plant in the southern state of Telangana. The report, however, doesn't mention how much the AirPod order would be worth.

Foxconn's subsidiary, Foxconn Interconnect Technology Ltd plans to start construction of a manufacturing facility in Telangana in the second half of 2023 and begin production by the end of 2024 at the earliest, as per the report.

It says that Foxconn officials had debated internally for months about whether to assemble AirPods due to relatively lower profit margins on making the device, but ultimately opted to go ahead with the deal to "reinforce engagement" with Apple.

In the global market, Foxconn's rivals are Wistron Corp and Pegatron Corp and Foxconn is trying to win more orders from Apple, the world's most valuable company.

The strict COVID-19 curbs that were imposed in China last year had disrupted Foxconn's biggest iPhone factory. Apple and its main suppliers have been shifting production away from China. One other reason for the same is the mounting trade friction between US and China.

Foxconn on Wednesday said the company would ramp up investment outside China to meet customer demand and lower its reliance on China for production.

March 16, 2023