Major Apple Inc supplier Foxconn will set up a new 300-acre iPhone factory in Karnataka, a decision that comes as a surprise for many as Tamil Nadu is being touted as the new favourite base for electric vehicles and chip makers.
This could mark a shift in strategy for Foxconn, which was unhappy with the Tamil Nadu government’s role during an unrest at its Chennai factory in December 2021 that was sparked by a food poisoning incident.
There was a feeling within the company that the Stalin government did not do enough to mitigate the situation. Foxconn’s decision to choose Karnataka as the new base will help the state showcase its ability to house electronic giants ahead of the elections.
EV destination
Several new-age EV companies such as Ola Electric, Simple Energy and Ather Energy, among others, have set up electric vehicle manufacturing plants in and around the Hosur, Dharmapuri and Krishnagiri (HDK) belt in Tamil Nadu, just across the Karnataka border from Bangalore.
According to reports, a combination of factors has helped the HDK belt zoom: key players in the investor ecosystem that have backed these companies; a competent ancillary supplier network; and the proximity to Bangalore, which first gave Hosur the impetus as an industrial belt.
These three districts are located within 150 km of Bangalore, the headquarters for these new-age EV companies. If the cards are played right, this belt could emerge as a global player given the fast adoption of EVs, especially in the two-wheeler segment.
The Tamil Nadu government in February unveiled its electric vehicle policy 2023 which aims to garner investments to the tune of Rs 50,000 crore and generate 1.50 lakh jobs, in a boost to the EV industry.
Karnataka push
Foxconn and the Karnataka government signed a letter of intent on Friday to establish the manufacturing facility within five years.
Apple has been shifting production away from China after the country’s strict Covid19 restrictions disrupted the manufacturing of new-model iPhones and other devices, and amid tensions between Beijing and Washington.
Currently, iPhones are assembled in India by at least three of Apple’s global suppliers — Foxconn and Pegatron in Tamil Nadu, and Wistron in Karnataka. There were reports of worker unrest at the Tamil Nadu plant last year.
In January, India’s trade minister said Apple, which began iPhone assembly in the country in 2017 through Wistron Corp and later Foxconn, wants India to account for up to 25 per cent of its production from about 5 per cent to 7 per cent.
Taiwan’s Foxconn said chairman Liu Young-way had visited India from February 27 to March 4. “My trip this week supported Foxconn’s efforts to deepen partnerships, meet old friends and make new ones, and seek cooperation in new areas such as semiconductor development and electric vehicles,” Liu said in a statement.
Foxconn has ambitious plans to make EVs and is also looking to make chips. “On the basis to share, collaborate and thrive together, Foxconn will continue to communicate with local governments to seek the most beneficial development opportunities for the company and all stakeholders,” Liu added.
With inputs from Reuters
