The Tata Group is in talks with Taipei Wistron Corporation, one of Apple’s top three suppliers in India, to buy its sole manufacturing facility in Karnataka for Rs4000–5,000 crore, The Economic Times reported on November 30.
The agreement will help Tata increase the production capacity of group company Tata Electronics Pvt. Ltd. (TEPL) in precision engineering.
TEPL is already a component supplier for Apple’s iPhone devices and plans to work with other major Korean and Japanese manufacturers as part of a “larger electronics ecosystem.”
The Tata Group declined to comment on ET’s queries, and emails sent to Wistron did not elicit a response.
According to the report, Tata Group also planned to establish an electronics joint venture with Wistron, as Bloomberg reported in early September.
“The Tatas run the show, but Wistron may hold a small stake to tap into Apple’s global supplier ecosystem,” sources told the Economic Times. Tata Sons’ wholly-owned subsidiary TEPL was set up to spearhead the group’s efforts as an expanded contract manufacturer of handsets and components after group chairman N Chandrasekaran sought to capitalize on the geopolitical backlash against China and court smartphone companies such as Apple for alternative production facilities in India.
Foxconn, Pegatron, and Wistron are Apple’s three main suppliers in India. Apple currently manufactures the iPhone SE, iPhone 12, iPhone 13, and iPhone 14(base) models in India. All Pro models sold in the country are imports.
In September, Bloomberg News reported that the Tata Group was in negotiations with the Taiwanese supplier of Apple Inc. to set up an electronics joint venture in India with the aim of assembling iPhones in the South Asian country.
For Wistron’s India business, which is struggling with losses, a deal with Tata would give it a great local partner with deep pockets. According to a Bloomberg report, Tata’s reach is also expanding into cars, including electric vehicles, an area where many of the world’s tech giants are looking to expand.
Wistron’s InfoComm also recently emerged as the largest investor under the government’s Manufacturing Linked Incentives (PLI) for large-scale electronics manufacturing, bringing in 1,250 crores, followed by local units of Samsung and Foxconn, which invested 900 crores and 90 crores, respectively. 650 crowns, respectively. The government launched the program in March 2020 to promote products and create jobs.
If the deal goes through, Tata could become the first Indian company to build iPhones, which are currently mainly assembled by Taiwanese manufacturing giants such as Wistron and Foxconn Technology Group in China and India.