TAIPEI: Taiwan’s contract manufacturer Foxconn has received an order to make AirPods Apple Inc and plans to build a factory in India to make wireless earphones, two people with direct knowledge of the matter told Reuters.
After this deal, Foxconn will become the world’s largest contract electronics maker and assembler of about 70 percent of iPhones. Airpods Marks efforts by first-time supplier and major Apple supplier to further diversify production away from China. AirPods are currently made by a number of Chinese suppliers.
A source said that Foxconn will invest more than $200 million in the new India Airpods plant in the southern Indian state of Telangana. It was not immediately clear how much an AirPod order would cost.
The person, who requested anonymity, said that while the matter has not yet been made public, Foxconn executives had debated internally for months about whether to assemble the AirPods because of the relatively low profit margin on making the device, but eventually “Strong” opted to go ahead with the deal. engagement” with Apple.
“That way, we are more likely to get orders for their new products,” the person said.
As per the source, the decision to set up production in India was requested by Apple.
Foxconn vies with Taiwanese rivals such as Wistron Corp and Pegatron Corp to win more orders from Apple, the world’s most valuable company.
A subsidiary, Foxconn Interconnect Technology Ltd, plans to start construction of a manufacturing facility in Telangana in the second half of this year and start production by the end of 2024 at the earliest, the person said.
Shares of the Foxconn unit rose nearly 9% after Reuters first reported the news, reversing an earlier loss of 2.2%. Shares in Foxconn added 0.5%, while the Taipei benchmark was down 1.1%.
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 would make the AirPods in India, without giving further details.
Analysts had earlier said that Apple has asked suppliers including Foxconn to make the AirPods in India, but did not disclose details such as the size of the investment, timeline and manufacturing plans of the suppliers in the country.
Foxconn declined to comment. Apple did not immediately respond to a request for comment.
Apple and its major suppliers are shifting production away from China, where strict Covid-19 restrictions last year disrupted Foxconn’s biggest iPhone factory. They are also trying to avoid potential damage to trade from growing Sino-US trade friction.
Foxconn said on Wednesday it would increase investment outside China to meet customer demand and reduce its dependence on China for production.
It was not immediately clear whether Foxconn’s production plan would have an impact on current AirPod suppliers, including Luxshare Precision Industries.
Luxshare did not immediately respond to a Reuters request for comment.
Goertec Inc., another supplier, said in November that a foreign customer had asked it to suspend assembly work for a smart acoustics product, which analysts identified at the time as the AirPods Pro 2, and that the suspension would take 3.3 years. Revenue of up to billion yuan ($480) would be affected. million).
Goertek did not respond to a request for comment.
After this deal, Foxconn will become the world’s largest contract electronics maker and assembler of about 70 percent of iPhones. Airpods Marks efforts by first-time supplier and major Apple supplier to further diversify production away from China. AirPods are currently made by a number of Chinese suppliers.
A source said that Foxconn will invest more than $200 million in the new India Airpods plant in the southern Indian state of Telangana. It was not immediately clear how much an AirPod order would cost.
The person, who requested anonymity, said that while the matter has not yet been made public, Foxconn executives had debated internally for months about whether to assemble the AirPods because of the relatively low profit margin on making the device, but eventually “Strong” opted to go ahead with the deal. engagement” with Apple.
“That way, we are more likely to get orders for their new products,” the person said.
As per the source, the decision to set up production in India was requested by Apple.
Foxconn vies with Taiwanese rivals such as Wistron Corp and Pegatron Corp to win more orders from Apple, the world’s most valuable company.
A subsidiary, Foxconn Interconnect Technology Ltd, plans to start construction of a manufacturing facility in Telangana in the second half of this year and start production by the end of 2024 at the earliest, the person said.
Shares of the Foxconn unit rose nearly 9% after Reuters first reported the news, reversing an earlier loss of 2.2%. Shares in Foxconn added 0.5%, while the Taipei benchmark was down 1.1%.
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 would make the AirPods in India, without giving further details.
Analysts had earlier said that Apple has asked suppliers including Foxconn to make the AirPods in India, but did not disclose details such as the size of the investment, timeline and manufacturing plans of the suppliers in the country.
Foxconn declined to comment. Apple did not immediately respond to a request for comment.
Apple and its major suppliers are shifting production away from China, where strict Covid-19 restrictions last year disrupted Foxconn’s biggest iPhone factory. They are also trying to avoid potential damage to trade from growing Sino-US trade friction.
Foxconn said on Wednesday it would increase investment outside China to meet customer demand and reduce its dependence on China for production.
It was not immediately clear whether Foxconn’s production plan would have an impact on current AirPod suppliers, including Luxshare Precision Industries.
Luxshare did not immediately respond to a Reuters request for comment.
Goertec Inc., another supplier, said in November that a foreign customer had asked it to suspend assembly work for a smart acoustics product, which analysts identified at the time as the AirPods Pro 2, and that the suspension would take 3.3 years. Revenue of up to billion yuan ($480) would be affected. million).
Goertek did not respond to a request for comment.
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