Tata to buy Pegatron's iPhone plant in India- All details you need to know

Tata Group is reportedly negotiating to take over Pegatron's sole iPhone manufacturing facility in India.

Tata Group is in advanced discussions to acquire Pegatron's iPhone production facility in India, signaling a strategic move for both companies amid evolving market dynamics. (unsplash)

Pegatron, the Taiwanese manufacturer, is reportedly in advanced negotiations to transfer control of its sole iPhone production facility in India to the Tata Group. According to sources familiar with the matter, this marks Pegatron's latest move in scaling back its partnership with Apple. Under the proposed deal, which has purportedly received Apple's approval, Tata Group is expected to hold a minimum 65% stake in a joint venture that would oversee operations at the Pegatron plant near Chennai. Pegatron would provide technical support and retain the remaining stake.

Pegatron has 10,000 workers
 

The joint venture would be operated by Tata Electronics, a unit of Tata Group, a major conglomerate in India. The Pegatron facility in India currently employs approximately 10,000 workers and manufactures around 5 million iPhones annually. This factory represents Pegatron's last remaining iPhone production site after it sold a similar facility in China to Luxshare for $290 million last year.

Financial details of the ongoing negotiations have not been disclosed, and neither Tata nor Pegatron, nor Apple, have commented on the matter. This development aligns with Apple's broader strategy of diversifying its supply chain beyond China amidst geopolitical tensions between the US and China. For Tata, acquiring the Pegatron plant would significantly enhance its iPhone manufacturing capabilities in India.

Tata already operates an iPhone assembly plant in Karnataka, acquired from Wistron last year, and is constructing another facility in Hosur, Tamil Nadu. The potential partnership with Pegatron could further bolster Tata's presence in the Indian iPhone manufacturing landscape.

The negotiations reportedly also involve taking over another iPhone factory that Pegatron has been building at its Chennai campus. It is anticipated that the talks will be concluded within six months, with all Pegatron India employees transitioning to the new joint venture.

Analysts anticipate that Tata's involvement will be instrumental in supporting Apple's ambitions for the Indian market, which is projected to account for 20-25% of total iPhone shipments this year, up from 12-14% in the previous year. The reasons behind Pegatron's gradual retreat from its Apple business, including its Indian operations, remain undisclosed. Last year, Pegatron cited the need to raise capital for "business optimization" as the rationale behind selling its plant in China.