Tata's iPhone plant in Hosur dependent on components sourced from China: Report

Tata's iPhone plant in Hosur, Tamil Nadu is facing challenges in achieving the goal of Make in India as key iPhone components are being sourced from China and cross the Indian border multiple times before final assembly, reported The Economic Times.

Approximately 90 per cent of the components used by Tata for Apple phones are sourced from China, despite Apple's intention to shift manufacturing to India.

Tatas have been selected by Apple as a vendor to diversify its manufacturing away from China. Currently, they are producing the semi-finished iPhone SE model, but trial runs for part assembly of the upcoming iPhone 15 have begun at the Hosur facility, ET reported.

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Only Apple's long-time vendors such as Foxconn, Pegatron, and Wistron manufacture complete iPhones in India. India accounted for 5 per cent of global iPhone production in FY23, with a significant increase in exported phones worth $5 billion compared to the previous year.

The supply chain management in the assembly process involves the shipping of lightweight aluminum sets from China, precise machining processes and assembly of mechanical components in Hosur. However, the semi-finished units are again sent to China for final assembly.

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Local sourcing accounts for around 10-15 per cent of components, seriously bringing into question India's reliance on other countries for domestic manufacturing capabilities. To tackle this issue, Tatas plan to acquire the Wistron facility near Bengaluru to expand production and become an integrated vendor for all of Apple's electronic components, including semiconductors.

According to Bloomberg Intelligence, Apple may only be able to outsource ten per cent of its production in the next ten years, contrary to a JP Morgan estimate suggesting that a quarter of iPhone production will move out of China in the next 5-8 years.