Extensive damage caused by the fire at Apple Group’s iPhone components factory in southern India could hamper production ahead of the holiday season, an industry watcher said. sector and a source, which would force the American company’s suppliers to obtain essential parts from China or elsewhere.
The weekend fire led to an indefinite production shutdown at Tata’s Hosur factory in Tamil Nadu, India’s sole supplier of iPhone back panels and other parts to the contract manufacturer Foxconn in the country and for its own iPhone assembly plant in another factory.
Hong Kong-based Counterpoint Research told Reuters it estimates local sales of iPhone 14 and 15 during India’s holiday season at 1.5 million units, which spans from late October to early November, and that Apple was struggling to meet up to 15% of that demand due to the fire.
“There will be a 10-15% impact on the production of older iPhone models in India. Apple could offset this impact by importing more components and diverting more export inventory to India,” it said. Neil Shah, co-founder of Counterpoint, who has been tracking Apple’s global shipments for years.
Apart from local sales, Tata, one of India’s largest conglomerates, has also exported iPhones to the Netherlands and the United States, as well as some parts to China, with a total value of over 250 million dollars, in the year ending August 31, according to commercially available customs data.
Tata declined to comment.
Apple suppliers typically have a three- to four-week supply of back panels, according to Counterpoint. An industry source with direct knowledge of the matter, however, estimated that Apple was likely to have an eight-week supply and so there would be no immediate impact.
However, this source added that if the suspension of production continues, the American company could set up another assembly line in China or add teams there to obtain parts for Indian manufacturers of the iPhone.
More broadly, supply chain disruptions have cast a shadow over Prime Minister Narendra Modi’s efforts to attract foreign investors under the “Make in India” agenda, particularly in the electronics sector. .
Apple has diversified beyond China, but last year separate fires in India forced suppliers Foxlink and Pegatron to briefly halt operations as authorities found that much of Apple’s equipment Fire safety at the Foxlink factory was not in working order. Subcontractors Wistron and Foxconn have also been hit by labor disputes in recent years.
“These are temporary setbacks,” said Prabhu Ram, vice president of Cybermedia Research. “Continued efforts to improve safety and operational standards are critical to strengthening India’s position as an emerging global electronics manufacturing hub.
Tata is one of Apple’s newest suppliers in India, which analysts estimate will contribute 20-25% of total global iPhone shipments this year, up from 12-14% last year.
The factory affected by the fire employed 20,000 people. Another unit at the same Tata complex was due to start manufacturing complete iPhones later this year and it is unclear whether the incident will cause a delay.
Tata has another iPhone manufacturing plant near Bengaluru, which it bought from Wistron last year, and a second in Tamil Nadu, near Chennai, which it is preparing to buy from Pegatron.
