Taiwanese contract manufacturer Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團) internationally, has won an order to make AirPods for Apple Inc and plans to build a factory in India to produce the wireless earphones, two people with direct knowledge of the matter said.
The deal would see Hon Hai, the world’s largest contract electronics maker and assembler of about 70 percent of all iPhones, become an AirPod supplier for the first time, and underlines efforts by the key Apple supplier to diversify production away from China.
AirPods are currently made by a range of Chinese suppliers.
Hon Hai would invest more than US$200 million in the new India AirPod plant in the southern state of Telangana, one source said, requesting anonymity as the matter is not public.
It was not immediately clear how much the AirPod order would be worth.
Hon Hai officials debated internally for months about whether to assemble AirPods due to relatively lower profit margins on making the device, but they opted to go ahead with the deal to “reinforce engagement” with Apple, the person said.
“That way, we are more likely to get orders for their new products,” the person added.
The decision to set up production in India was requested by Apple, the source said.
A subsidiary, Foxconn Interconnect Technology Ltd (鴻騰精密), plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of next year at the earliest, the person said.
The subsidiary would make AirPods in India, a second source said, without providing further details.
Analysts have previously said Apple has asked suppliers including Hon Hai to make AirPods in India, but details such as the size of investment, timeline and which suppliers have manufacturing plans in the country have not been disclosed.
Hon Hai declined to comment. Apple did not immediately respond to a request for comment.
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