Apple to set up iPhone chip units worth $12 billion in India

Apple will build factories in India to generate chip supplies worth $12 billion for iPhones it manufactures in the country. The American tech firm is in talks with the Tata Group, Micron Technology and other makers of semiconductors to embark on the project.

Apple’s demand for semiconductors has been progressively increasing, and the trend is projected to pick up over the next couple of years. By 2026, nearly 26 per cent of all iPhones made in the world are expected to be manufactured in India. The figure marks a significant growth for Apple. The fiscal year 2023-’24 (FY24) saw around 14 per cent of iPhones produced worldwide being made in India, worth nearly $14 billion.

Globally, Apple’s semiconductor demand has surged to around $72 billion in 2024 from $18.8 billion in 2011 for its products, iPhones, Macs, Apple Watches, AirPods and iPads.

Overall, global semiconductor demand is estimated to become an industry of nearly $1-trillion by 2030.

In India, the government introduced an incentive scheme worth Rs 76,000 crore for semiconductor manufacture in 2022, and five projects worth Rs 1.5 lakh crore have been passed till date. These are Tata Group’s Rs 27,000-crore ATMP project in Assam and Tata Group-Powerchip Semiconductor’s Rs 91,000-crore semiconductor fabrication project in Dholera, Micron’s Rs 22,516 crore ATMP project in Sanand, Kaynes’ Rs 3,300-crore OSAT project in Sanand and CG Power’s Rs 7,600-crore ATMP project in Sanand.

Till 2021, Apple manufactured its entire iPhone stock and almost all other products in China. With nearly every major tech giant producing in that country till about three years ago, China became the biggest purchaser of chips in the world, consuming over 50 per cent semiconductors sold globally. In India, Apple’s three Taiwanese vendors started manufacturing iPhones, its most popular product, through the government’s smartphone production-linked incentive scheme in 2021.

For potential collaborators such as Tata or Micron who enter into the proposed $12 billion venture with Apple, ready clientele beyond the iPhone makers would also include the defence, automobile and aviation industries, according to media reports.

BOOST FOR TAMIL NADU

Meanwhile Jabil, which is a leading supplier of electronic components to Apple, is all set to pump in Rs 2,000 crore for a manufacturing unit in Tiruchirappalli, Tamil Nadu. The project is expected to generate around 5,000 jobs, a statement by the state government said. Jabil, which also supplies to brands such as HP and Cisco, has entered into the agreement in the presence of Tamil Nadu Chief Minister MK Stalin in the United States.

“Key investments secured for Tamil Nadu’s industrial progress! A significant investment of Rs 2,000 crore at Tiruchirapalli by Jabil, a global leader in EMS. This will create 5000 jobs and create a new cluster for electronics manufacturing,” Stalin posted on X.

Apple suppliers Tata Electronics, Foxconn and Pegatron already have manufacturing units in Tamil Nadu and the Jabil project will “create a new electronics cluster”, the statement added.