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Apple’s second-largest manufacturer Pegatron approves $150 million for India facility: Report

Pegatron registered its subsidiary in India in July 2020. It did not have operations in the country prior to this and began operations only in September

November 23, 2020 / 05:34 PM IST

The board of Pegatron has approved initial investment of $150 million or Rs 1,100 crore to build manufacturing facilities in India, CEO Liao Syh-jang said.

The factory is expected to begin production by 2021 second half or early 2022 and Liao said more investments would be incoming over the next two years, The Economic Times reported.

Pegatron is Apple’s second-largest contract manufacturer. The statements were made by Liao at an investor conference in Taiwan last week and covered by local media, the report said.

Moneycontrol could not independently verify the reports.

Pegatron and Apple did not respond to queries, as per the report.

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Pegatron registered its subsidiary in India in July 2020. It did not have operations in the country prior to this and began operations only in September. The Taiwan-based manufacturer said the COVID-19 pandemic had delayed staff visits to India.

Reports in September said that Apple's top three contract manufacturers Foxconn, Wistron and Pegatron planned to invest a total of almost $900 million in India in the next five years to tap into a new production-linked incentive (PLI) plan.

India's new $6.65 billion production-linked incentive (PLI) scheme offers companies cash incentives on any increase in sales of locally-made smartphones over the next five years, compared with 2019-20 levels. The scheme aims to help transform India into an export manufacturing hub.

Foxconn has applied to invest about Rs 4,000 crore ($542 million) while Wistron and Pegatron have committed to invest close to Rs 1,300 crore and Rs 1,200 crore rupees, respectively, under the PLI plan, sources then said.

The commitments would help Apple diversify its supply chain beyond China, locked in a trade war with the United States. It started assembling in 2017 a low-cost iPhone model in India through Wistron's local unit in the tech hub of Bengaluru. It later ramped up production, with Foxconn beginning to assemble iPhones last year and Wistron widening operations.

"India is key to Apple's global ambitions as it expands beyond China," said Tarun Pathak, an associate director at tech researcher Counterpoint. "It offers a strategic market to them where skilled labour is cheaper as compared to other manufacturing destinations, the size of the internal market is huge and the export potential is enormous."
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first published: Nov 23, 2020 01:41 pm
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