Sources Suggest Apple May Return to China After The Tata Factory Fire In India

Report source from BENGALURU in NEW DELHI says that there is significant damage from a fire at the southern Indian Tata Group facility that makes Apple iPhone components might impede production ahead of a spike in sales over the holiday season, according to a source and an industry observer. This would force the U.S. firm’s suppliers to arrange for crucial parts to be shipped from China or somewhere else.

The Hosur facility in Tamil Nadu, which is the only Indian supplier of iPhone back panels and certain other parts for both the nation’s contract manufacturer Foxconn and its own iPhone assembly at a different plant, has had its production put on hold indefinitely due to the weekend fire.

The Tata facility in Hosur, Tamil Nadu, which is the only Indian provider of iPhone back panels and certain other parts for both the nation’s contract manufacturer Foxconn and its own iPhone assembly at another plant, has had its production put on indefinite hold due to the weekend fire.

With the fire, Apple may not be able to meet up to 15% of the demand for iPhone 14 and 15 models locally, according to Hong Kong-based Counterpoint Research, which told Reuters it expects local sales of 1.5 million handsets during the Indian festival season, which runs from late October to early November.

The manufacture of earlier iPhone models from India would be impacted by 10% to 15%. Apple might counteract that effect by rerouting more export inventory towards India and importing more components, according to Neil Shah, a co-founder of Counterpoint, a company that has been tracking Apple’s international exports for years.

In addition to selling iPhones locally, Tata, one of the largest conglomerates in India, exported the device to the US, the Netherlands, and China for a total value of over $250 million in the year that ended on August 31, according to publicly accessible customs statistics.

Tata opted not to respond when interviewed.

Back panels are often kept in stock by Apple suppliers for three to four weeks, according to Counterpoint. However, an industry insider with first-hand knowledge of the situation said that Apple would likely hold its shares for eight weeks, delaying any immediate effects.

In order to get parts for India’s iPhone producers, the American corporation may establish another assembly line in China or add shifts there, they claimed, if the production stoppage persists which seems to be an alternative idea.

Disruptions to supply chains in general have clouded Prime Minister Narendra Modi’s efforts to entice international investors to “Make in India,” particularly in the electronics industry.

Apple has been expanding outside of China, but suppliers Foxlink and Pegatron had to temporarily cease operations due to separate fire accidents in India last year. The authorities discovered that a large portion of the fire safety equipment at Foxlink’s plant was non-functional. In recent years, labour unrest has also affected contractors Wistron and Foxconn.

According to Prabhu Ram, vice president of Cybermedia Research, “these are temporary setbacks.” “Continued efforts to improve safety and operational standards are crucial for strengthening India’s position as an emerging global electronics manufacturing hub.”

Tata is one of Apple’s newest suppliers in India, which experts predict will account for 20–25% of all iPhone shipments worldwide this year, up from 12–14% in the previous year.

Nearly 20,000 people were employed by the facility that caught fire. It’s unclear if the event would cause a delay in the production of entire iPhones, which was scheduled to begin later this year at another unit at the same Tata facility.

Two iPhone plants are owned by Tata: one in Tamil Nadu, close to Chennai, which it plans to purchase from Pegatron, and another in Bengaluru, which it purchased from Wistron last year.