Apple partner Foxconn plans to build a $700 million iPhone factory in Karnataka to boost local production and move out of China.

Apple partner Foxconn Technology Group plans to invest about $700 million (about Rs 5,763 crore) in a new factory in India to boost local production, people familiar with the matter said, citing a shift of manufacturing away from China due to Washington-Beijing tensions. increase.

A Taiwanese company also known as Hon Hai Precision Industry Co. known for its flagship unit, plans to set up an iPhone parts manufacturing plant on a 300-acre site near the state capital’s Bengaluru airport. According to the people in South Karnataka, India, who asked not to be named because the information is not public. Some say the factory could assemble Apple phones, and Foxconn could use the site to produce some parts for its fledgling electric vehicle business.

The investment is one of Foxconn’s biggest investments in India and shows how China is losing its status as the world’s leading producer of consumer electronics. Apple and other American brands rely on their suppliers in China to explore alternative destinations such as India and Vietnam. It’s an overhaul of global supply chains that has been accelerated by the pandemic and the war in Ukraine and could change the way electronics are made globally.

The new manufacturing facility in India is expected to create around 100,000 jobs, sources said. The company’s sprawling iPhone assembly facility in Zhengzhou, China currently employs about 200,000 people, though that number swells during peak production seasons.

Production at its Zhengzhou plant has slumped ahead of the holiday season due to Covid-related disruptions, prompting Apple to rethink its China-dependent supply chain. Foxconn’s move is the latest to show that suppliers may be pulling capacity out of China much faster than expected.

Plans are still subject to change as Foxconn finalizes investment and project details, the people said. It’s also unclear whether the plant represents new capacity or production that Foxconn is moving from other sites, such as Chinese facilities.

Apple declined to comment. Chairman Yang Liu did not immediately respond to an email seeking comment on Hong Hai, who met with Indian Prime Minister Narendra Modi this week. The Karnataka state government also did not immediately respond. While on tour in India, Liu took up another production project in the neighboring state of Telangana.

Foxconn’s move would be a coup for the Modi government, which sees an opportunity to close the technology gap between India and China as Western investors and companies wary of Beijing’s pressure on the private sector.

India has offered financial incentives to Apple suppliers such as Foxconn, which last year began manufacturing the latest generation of iPhones at a site in Tamil Nadu. Smaller competitors include Wistron Corp. and Pegatron Corp. also grew in India as Jabil Inc. suppliers such as have started producing components for AirPods locally.

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