Apple Supplier Foxconn Said to Plan $200 Million Factory in India After Winning AirPods Order

Foxconn is set to become an AirPods supplier for the first time as the contract manufacturer attempts to diversify production away from China.

By Reuters | Updated: 16 March 2023 10:40 IST

Photo Credit: Bloomberg

Apple has been looking to diversify production away from China.

Highlights

Foxconn is said to have won an order to make Apple AirPods
The firm will invest more than $200 million in the new India plant
Foxconn's new India plant is expected to be built in Telangana

Taiwanese contract manufacturer Foxconn has won an order to make AirPods for Apple and plans to build a factory in India to produce the wireless earphones, two people with direct knowledge of the matter told Reuters.

The deal will see Foxconn, the world's largest contract electronics maker and assembler of around 70 percent of all iPhones, become an AirPods supplier for the first time and underlines efforts by the key Apple supplier to further diversify production away from China. AirPods are currently made by a range of Chinese suppliers.

One source said Foxconn will invest more than $200 million (roughly Rs. 1,650 crore) in the new India AirPods plant in the southern Indian state of Telangana. It wasn't immediately clear how much the AirPods order would be worth.

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The person, who requested anonymity as the matter was not public yet, said 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.

"That way, we are more likely to get orders for their new products," the person said.

The decision to set up production in India was requested by Apple, according to the source.

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Foxconn vies with Taiwanese rivals such as Wistron and Pegatron to win more orders from Apple, the world's most valuable company.

A subsidiary, Foxconn Interconnect Technology, plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024 at the earliest, the person said.

A second person with direct knowledge of the matter, who also declined to be identified as the matter was not yet public, said the Foxconn subsidiary will make AirPods in India without providing further details.

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Analysts have previously said Apple has asked suppliers including Foxconn to make AirPods in India, but details such as the size of investment, timeline and which suppliers have manufacturing plans in the country have not been disclosed.

Foxconn declined to comment. Apple did not immediately respond to a request for comment.

Apple and its key suppliers have been shifting production away from China, where strict COVID-19 curbs disrupted Foxconn's biggest iPhone factory last year. They are also seeking to avoid a potential hit to business from mounting Sino-US trade friction.

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

It was not immediately clear whether Foxconn's production plan would have impact on current AirPods suppliers, including Luxshare Precision.

Luxshare did not immediately reply to a Reuters' request for comment.

Goertek, another supplier, said in November an overseas client had asked it to suspend assembly work for a smart acoustic product, which analysts at the time identified as AirPods Pro 2, and the suspension would hit revenue by up to 3.3 billion yuan (roughly Rs. 4,000 crore)

Goertek did not respond to a request for comment.

© Thomson Reuters 2023

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Apple AirPods Pro (2nd generation) True Wireless Stereo (TWS) Earphones

REVIEW
KEY SPECS
NEWS

Design / Comfort
Audio Quality
Battery Life
Value For Money

Good
Classic design with improved controls
Comfortable fit
State-of-the-art charging case
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Some features only work on Apple devices
Somewhat expensive

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Colour White

Headphone Type In-Ear

Microphone Yes

Connectivity True Wireless Stereo (TWS)

Type Earphones

More Apple Headphones & Headset

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