The iPhone XR is being made at the Chennai facility of Foxconn, the world’s largest contract manufacturer. With Salcomp’s entry, the Nokia telecom special economic zone near Chennai is expected to see complete revival, with most shuttered units, including one belonging to Foxconn, likely to resume production by March.
The government has asked Cupertino, California-based Apple to expand operations in India, with Prasad declaring that India will have the most favourable regime to become a big centre for mobile manufacturing<\/a>.
“I expect further expansion of manufacturing in India by #Apple,” Prasad said in a Twitter post on Monday.
Apple aims to make India a key global production hub even though it has a dismal 2% share of the country’s smartphone market. This will include assembly of flagship iPhones in sync with their worldwide release schedules. It will also help as a de-risking strategy with companies looking for production facilities beyond China, currently engaged in a trade spat with the US.
ET reported earlier that Apple will export the devices, having tested the waters with shipments of the iPhone 6s and 7 models to Europe in the past few months.
Apple has also been expanding its base of suppliers in India. It recently began sourcing battery packs from Flex Ltd. Others including Salcomp, Sunwoda Electronic Co., CCL Design (Suzhou) and Shenzhen Yuto Packaging Technology Co. are manufacturing parts and accessories in India.
Salcomp, Apple’s leading supplier for chargers globally, is set to revive the defunct Nokia factory in March 2020 and will invest Rs 2,000 crore in the facility over the next five years.
“This big SEZ of Nokia, which was closed for 10 years, will now start again. 10,000 people will get direct jobs and 50,000 indirect jobs,” Prasad said. He added that 70% of the products will be exported to countries including China.
The minister said India’s mobile phone exports had risen to $1.6 billion in 2018-19 from $200 million in 2017-18. Exports in 2019-20 will be $1.6 billion from mobile phones and $1.6 billion from electronic components.
Tamil Nadu government officials said there is a scramble for land and brownfield setups from electronics manufacturers, thanks to the trade war between the US and China.
Finnish company Salcomp, recently acquired by China’s Lingyi iTech, sealed the deal to buy the 1 million sq. ft Nokia factory inside the 212-acre SEZ last week. Salcomp also recently purchased the 300,000 sq. ft unit of Lite-on Mobile factory inside the SEZ.
“Flex, previously Flextronics, and one other company had expressed interest in the Nokia factory, but it finally went to Salcomp,” said a senior government official.
Taiwanese phone maker Foxconn has an idle unit inside the SEZ and may consider reopening the unit, an official aware of the India unit’s plans told ET. Foxconn recently started making high-end iPhones at its 160-acre plant outside the Nokia telecom SEZ.
Salcomp India managing director Sasikumar Gendham said most companies are adopting a “China plus one” strategy, looking out for a base beyond China to support manufacturing.
“The advantage for India is its huge domestic market, compared to its competitors such as Vietnam, and we can do much better by way of a concerted export policy<\/a> push to make the most of this shift,” he said.
Salcomp India has raised capacity across its three factories in the country to 150 million chargers a year, investing Rs 200 crore in the past two years.
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