Foxconn secures AirPod order, to build $200M plant in India
- ByStartupStory | March 16, 2023
Reports suggest that Foxconn, a Taiwanese manufacturer, has been awarded a contract to manufacture Apple’s AirPods and is now intending to construct a manufacturing facility in India to produce these wireless earphones.
Foxconn, the world’s biggest contract electronics manufacturer, has secured the contract to produce AirPods for Apple. This marks Foxconn’s entry into the AirPod supply chain, in addition to already assembling about 70% of all iPhones.
This move highlights Foxconn’s efforts to expand its manufacturing operations beyond China, where the majority of AirPods are currently produced by various Chinese suppliers.
According to a source, Foxconn is reportedly investing over $200 million to establish the new AirPod manufacturing plant in the southern Indian state of Telangana. However, it remains unclear how much the AirPod order is valued at.
An anonymous source has revealed that Foxconn executives had been discussing the feasibility of producing AirPods for several months. The company was reportedly concerned about the relatively lower profit margins associated with manufacturing these devices. However, in the end, Foxconn decided to proceed with the deal as a means of strengthening its partnership with Apple.
According to the source, it was Apple that requested Foxconn to establish AirPods production in India.
As the world’s most valuable company, Apple’s orders are highly sought after by Taiwanese competitors such as Wistron Corp and Pegatron Corp, with Foxconn being one of them.
According to a source, Foxconn Interconnect Technology Ltd, a subsidiary of Foxconn, plans to begin building an AirPods manufacturing facility in Telangana in the second half of 2023. Production is expected to start at the earliest by the end of 2024.
In response to the COVID-19 pandemic and the growing trade tensions between China and the US, Apple and its major suppliers have been gradually relocating their manufacturing operations away from China.
Foxconn, in particular, had faced significant disruptions at its largest iPhone factory in China due to strict COVID-19 measures imposed last year. By diversifying their production locations, Apple and its suppliers aim to mitigate the potential negative impacts of these external factors on their business.
It remains uncertain whether the production plans of Foxconn will affect the current AirPods suppliers, such as Luxshare Precision Industry.
In November, Goertek Inc, a different AirPods supplier, had revealed that an overseas client had requested it to temporarily halt assembly work for a smart acoustic product, which analysts had identified as AirPods Pro 2. This suspension of assembly work was expected to have an adverse impact on Goertek’s revenue, potentially resulting in a loss of up to 3.3 billion yuan ($480 million).
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