MC EXCLUSIVE Apple ramps up iPhone machinery manufacturing in India amid China squeeze

iPhone India

Apple is rapidly expanding its supply chain in India by not only sourcing components for iPhones but also manufacturing machinery essential to make these devices locally, sources have told Moneycontrol.

So far, about 35 companies are building such machinery in India, of which nearly half are now supporting Apple, they said.

“There are around 35 companies, which already have capital goods strength, active in the capital machinery ecosystem for multiple sectors. Around 50 percent of the companies have started directly working with Apple in India for capital equipment and tools in the last 20–24 months,” one of the sources cited above said.

The American tech giant is increasing the local content in its India-made iPhones, aiming to match Chinese production levels over the next two to three years.

The India network

Titan Engineering and Automation Ltd (TEAL), Jyoti CNC Automation, Bharat Forge and Wipro are among the major players supplying capital equipment to Apple. Smaller firms including non-Chinese companies that have set up operations in India are also supporting Apple, sources added.

Apple plans to significantly increase the number of these partners over the next two to three years.

Apple is working with these companies to reduce logistical risks, lower operational costs and build a more resilient supply chain.

“The know-how and IP are with Apple of this machinery, which is used after the SMT line production, which just produces the PCB,” the source quoted above said.

“There are different types of machines required and that’s where Apple is localising the manufacturing of this machinery in India.”

Surface mount technology (SMT) is an assembly process where components such as resistors, capacitors, and chips are mounted directly onto a printed circuit board. SMT lines make the circuitry that powers smartphones.

Apple’s partners are also helping miniaturise capital equipment for electronics, especially smartphones. “With Apple’s IP and know-how, these companies are helping build the tools required for iPhone production,” the source said.

This comes at a time when China is restricting supply of such equipment to India, particularly to Apple suppliers such as Foxconn, Tata Electronics, and Jabil.

India remains heavily dependent on Chinese machinery, which also requires on-site support from Chinese experts.

China has not only halted machinery exports but in recent months also asked some equipment firms to shut India operations and withdraw Indian professionals from their teams.

“Apple understands this and is working to address this issue which keeps escalating at regular intervals,” another source said.

Apple, Titan Engineering and Automation Limited (TEAL), Jyoti CNC Automation and Wipro didn't respond to Moneycontrol's queries.

Typically, its main assemblers such as Foxconn procure machines through Apple-owned subsidiaries. In April, an Indian unit of Hon Hai, Foxconn’s parent company, bought equipment worth $33 million from Apple Operations Ltd.

In October, Foxconn had procured specialised equipment worth $31.8 million (about Rs 267 crore) to begin manufacturing the iPhone 16 Pro series at its Tamil Nadu facility.

“While China recalling workers back from companies like Foxconn can always be addressed, the bigger challenge remains capital equipment for the company and for the industry at large,” the second source said.

Local sourcing

Separately, Apple is engaging with Indian firms to explore joint ventures with Chinese, South Korean, Taiwanese and Japanese companies for the local production of critical components such as displays and camera modules.

It now has 35–40 companies supplying components, including smaller assembly players.

Flex Limited, Salcomp, TDK, Sunwoda Electronic, Cheng Uei Precision Industry (Foxlink), Jabil Incorporated, Lingyi iTech, On Semiconductor, Zheng Ding Technology, CCL Design (Suzhou), Molex Incorporated, Shenzhen YUTO Packaging Technology, Tata Electronics, Aequs Group, Motherson Group, 3M, Shenzhen Everwin Precision Technology, and Taiwan Surface Mounting Technology Corporation are some of them.

Foxconn subsidiary Yuzhan Technology is setting up a Rs 13,180-crore ($1.5 billion) display module assembly unit in Tamil Nadu, which will handle components such as camera modules.

China continues to dominate Apple’s supplier network, accounting for 157 of the 470 units listed by Apple in 2023, followed by Taiwan with 48. Sources said these numbers have changed only marginally.

Apple vendors have crossed 20 percent domestic value addition in India but the government is pushing it and the broader electronics industry to raise it to 30–40 percent to match China.

“Current domestic value addition is concentrated in self-assembly items — batteries and cells, chargers, mechanicals, packaging, boxes, cables, and a handful of smaller parts — yielding roughly ~20 percent DVA across iPhone models. New Delhi wants that to rise to 30–40 percent,” a third source said.

Along with Foxconn and Tata, Apple is now producing iPhones in five factories, including two recently opened plants, to reduce reliance on China.

“For this, a lot of capacity expansion and local sourcing efforts are needed. The strategy is being executed,” the third source said.

The government, having tasted success in large-scale assembly, is now pushing to deepen the electronics value chain. Critical components such as displays and camera modules — among the most complex and high-value parts — are still imported but localisation is expected once companies secure approvals under the ECMS 2.0 scheme. This could significantly lift India’s value addition and narrow the gap with China, experts say.

Apple is also pressing ahead with expanding iPhone and AirPod manufacturing in the country despite pressure from US President Donald Trump to limit its Indian footprint.