Apple Inc’s major iPhone assemblers are among the companies expected to win approval to participate in a US$6.6 billion stimulus program to bring manufacturing to India, people familiar with the matter said, a potentially seismic shift as the world’s most valuable company diversifies beyond China.
The Indian government at a Cabinet meeting tomorrow is expected to approve a plan aimed at bringing US$150 billion in mobile-phone production to the nation over the next five years, said the people, who asked not to be identified because the matter is private.
Among the dozen phone makers already cleared by a high-powered government committee are Apple’s primary supplier, Hon Hai Precision Industry Co (鴻海精密), known internationally as Foxconn Technology Group (富士康科技集團), which had submitted two applications, as well as its Taiwanese peers Wistron Corp (緯創) and Pegatron Corp (和碩), the people said.
The three firms make virtually every iPhone sold globally in sprawling factories mainly in China.
Under the Production Linked Incentive (PLI) program, manufacturing incentives are to rise each year in an ongoing effort to entice the world’s biggest smartphone brands to make their products in India and export to the world.
Besides the Apple contractors, Samsung Electronics Co is the only other applicant for the five slots allotted to foreign companies.
China’s largest phone makers Huawei Technologies Co (華為) and BBK Group (步步高集團), which manufactures brands such as Oppo (歐珀) and Vivo (維沃), are conspicuous by their absence.
Amid rising trade and political tensions between the US and China, India is betting that many global brands would be keen to reduce their dependence on China.
If successful, the program could set in motion a shift in electronics manufacturing in the next five years.
“It’s a thoughtful move by the government aimed at wooing Apple to bring significant iPhone manufacturing to India because, when the iPhone maker shifts, an entire ecosystem follows,” said Hari Om Rai, chairman and founder of Lava International Ltd, India’s largest phone maker. “The next five years will be dramatic, and India could become the new China in phone manufacturing.”
Lava, based in the New Delhi suburbs, is among the Indian phone makers applying for manufacturing incentives, along with Karbonn Mobiles India Pvt Ltd and Dixon Technologies India Ltd.
To receive the incentives, foreign manufacturers, including Foxconn, Wistron and Samsung, must commit to specific investment and production targets of devices that sell for at least 15,000 rupees (US$204); Indian phone makers would have no such restrictions.
Indian Minister of Electronics and Information Technology Ravi Shankar Prasad last month told reporters that Apple accounts for 37 percent and Samsung 22 percent of global sales revenue from mobile phones.
The incentive scheme would “increase their manufacturing base manifold in the country,” the ministry said in a statement.
Apple did not respond to requests for comment.
Pegatron, the second-largest iPhone assembler after Foxconn with a number of factories in China, in July announced that it would set up a plant in India.
Apple accounts for more than half of Pegatron’s business. If approved, Pegatron’s first Indian factory would be eligible for PLI, the people said.
In the next five years, India could attract an additional 10 percent of global handset production, Credit Suisse Group AG said in a note.
Although the nation is the world’s second-largest handset market, with plenty of room for domestic sales growth, the government’s clear aim is to eventually become a global manufacturing colossus to rival China.
Almost two-thirds of the stimulus program is targeted at the export market, the people said.
Pankaj Mohindroo, chairman of the India Cellular and Electronics Association, a trade group that represents leading phone makers including Apple, Oppo and Xiaomi Corp (小米), said that incoming handset makers would be accompanied by a host of smaller sub-assemblers and component makers, expanding the sector to seven times its current size in the next five or more years.
“India’s incentive scheme will be a game-changer that will make the country No. 1 in mobile manufacturing, or at least a close No. 2, by 2025,” Mohindroo said.
Facebook Inc on Wednesday reported its profit doubled in the second quarter as digital advertising surged, but warned of cooler growth in the months ahead in an update that sent its shares sinking. Profit rose to US$10.4 billion on revenue of US$29 billion, a 56 percent increase from last year, mainly from an increase in ad revenue, Facebook said. The number of people using the social network monthly climbed to 2.9 billion, a year-on-year gain of 7 percent, while about 3.5 billion people used at least one of the company’s apps, including Instagram, WhatsApp and Messenger. “We had a strong quarter, as we
FURTHER TAX MEASURES NEEDED? Corporate owners accounted for almost 30 percent of empty houses, many of which are held by firms that own 10 or more properties The number of unoccupied houses nationwide totaled 876,000 units last year, or 11.94 percent of all houses, the Ministry of the Interior said in a report issued on Thursday. Almost 30 percent of empty houses were owned by companies, suggesting that many corporate property owners engage in house hoarding, the ministry said. Excluding developers and builders, companies still owned 20 percent of empty houses, it said. The report is based on housing units’ electricity use and considers properties that use less than 60 kilowatt-hours per month as unoccupied. The study contradicts Ministry of Finance reports saying that house hoarding subsided and there is no
HIGH-END MARKET: The company has sufficient growth upsides in its four major business segments to reach revenue of US$20 billion, CEO Rick Tsai told investors MediaTek Inc (聯發科), the world’s biggest supplier of 5G smartphone chips, yesterday raised its revenue growth target for this year to more than 45 percent, after strong demand mainly for its mid-range and premium 5G chips pushed net profit to a record high last quarter. The Hsinchu-based chip designer had three months earlier projected a 40 percent growth from NT$322.16 billion (US$11.48 billion) last year. MediaTek expects next year to be another growth year, with a higher 5G penetration rate and accelerating digital transformation during the post-COVID-19 pandemic era. The company also gained confidence about its gross margin improvement on the expectation
CAUSE INVESTIGATED: The incident occurred early in the morning, when electricity demand was low, and did not result in a power outage or a radiation leak, Taipower said The No. 2 reactor at the Guosheng Nuclear Power Plant in New Taipei City’s Wanli District (萬里) experienced a malfunction that triggered an automatic shutdown early yesterday morning, Taiwan Power Co (Taipower, 台電) said. The exact cause of the incident is still being investigated, but there is no risk of a radiation leak, the state-run utility said. “While we are still investigating the exact cause, the automatic shutdown was safely executed and there is no danger from radiation,” Taipower spokesman Chang Ting-shu (張廷舒) said. The malfunction occurred at 6:33am, triggering an emergency shutdown, taking 985 megawatts of power offline, Chang said. The control