Extensive fire damage at Tata Group’s Apple iPhone component plant in southern India could hamper production ahead of a sales surge during the holiday season, an industry watcher and a source said, forcing the US firm’s suppliers to source critical parts from China or elsewhere. .
The fire over the weekend caused an indefinite shutdown at Tata’s Hosur plant in Tamil Nadu, India’s sole supplier of iPhone back panels and some other parts for both contract manufacturer Foxconn in the country and its own iPhone assembly at another plant.
Hong Kong-based Counterpoint Research told Reuters it estimated domestic sales of 1.5 million iPhone 14 and 15 models during the Indian holiday season, which runs from late October to early November, with An apple are struggling to meet up to 15 percent of that demand because of the fire.
“There will be a 10-15 percent impact on the production of older iPhone models from India. Apple can offset this impact by importing more components and diverting more export inventory to India,” said Neil Shah, co-founder of Counterpoint, which has tracked Apple’s global shipments for years.
Besides domestic sales, Tata, one of India’s largest conglomerates, also exported iPhones to the Netherlands and the United States, as well as some parts to China, totaling more than $250 million (roughly Rs. 2,095 crore) in the year to August 31. show commercially available customs data.
Tata declined to comment.
Apple suppliers typically have three to four weeks’ worth of back panels in stock, Counterpoint said. However, an industry source with direct knowledge of the matter estimated that Apple would likely have eight weeks of inventory and therefore would not see an immediate impact.
However, they added that if the production shutdown continues, the US company may set up another assembly line in China or add shifts there to provide parts for iPhone makers in India.
Supply chain disruptions have generally cast a shadow over Prime Minister Narendra Modi’s drive to attract foreign investors to ‘Make in India’, particularly in the electronics sector.
Apple has been diversifying outside of China, but separate fire incidents in India last year caused suppliers Foxlink and Pegatron to briefly shut down operations after authorities found that much of the firefighting equipment at the Foxlink facility was malfunctioning. Contractors Wistron and Foxconn have also been hit by labor unrest in recent years.
“These are temporary setbacks,” said Prabhu Ram, vice president of Cybermedia Research. “Continued efforts to improve safety and performance standards are critical to strengthening India’s position as an emerging global electronics manufacturing hub.”
Tata is among Apple’s newest suppliers in India, which analysts say will contribute 20-25% of total global iPhone shipments this year, up from 12-14% last year.
The fire-damaged plant employs 20,000 workers. Another unit at the same Tata complex was due to start producing full iPhones later this year, and it’s unclear whether the incident will delay that.
Tata has another iPhone plant near Bengaluru, which it acquired from Wistron last year, and a second plant in Tamil Nadu near Chennai, which it is expected to acquire from Pegatron.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is automatically generated by a syndicated channel.)
