Foxconn, the Taiwanese contract manufacturer that produces 70% of iPhones, will manufacture a significant portion of Apple’s AirPods in India. To facilitate this, Foxconn plans to invest $200 million in building a new factory in Telangana.
Reuters reports that Foxconn has won an order from Apple—that will let it manufacture AirPods—for the first time ever, and marks the gradual shift from dependance on China.
A source has confirmed to Reuters that Foxconn will be investing over $200 million in their new AirPod plant in Telangana, India. However, the exact value of the AirPods order remains unclear. The source also revealed that Foxconn officials had deliberated for several months on whether to manufacture AirPods due to lower profit margins, but ultimately decided to proceed with the deal as a means of strengthening their partnership with Apple.
“That way, we are more likely to get orders for their new products,” Reuters’ source said.
Apple has chosen India as the manufacturing location, possibly to diversify production and reduce reliance on China amidst the recent COVID outbreaks and geopolitical tensions between Beijing and Washington. The construction of the manufacturing facility in Telangana is set to begin in the second half of this year, with AirPods production beginning no earlier than the end of 2024, according to the source.
It is unclear how Foxconn’s production plan will affect current AirPod suppliers, including Luxshare Precision Industry and Goertek Inc, who have not responded to the matter.
Earlier this year, reports emerged that Foxconn is considering producing iPhone parts on a 300-acre site near Bengaluru, Karnataka. This move could potentially create up to 1,00,000 jobs in India and mark a shift in the electronic components manufacturing hub away from China.
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