With Wistron & Pegatron deal, Tata Electronics set to emerge as India’s Foxconn – Technology News

After acquiring Wistron’s Karnataka unit and a 60% stake in Pegatron’s iPhone manufacturing plant in Chennai, Tata Electronics is set to emerge as India’s Foxconn.

Analysts said that the Tata Group company is the first Indian firm to have emerged as a global value chain (GVC) operator in the approximately $4.3 trillion global business. Its key advantage lies in being a contract manufacturer for Apple.

“In the electronics chain to emerge as a GVC player, a firm either needs to be a global brand or a supplier in the global value chain. With Wistron and Pegatron deals, Tata Electronics has successfully positioned itself as a GVC player,” an analyst said.

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Foxconn, Wistron and Pegatron are contract manufacturers of Apple in India. Of the total output of Apple’s iPhones in the country, 70% is produced by Foxconn, with the balance 30% shared between Wistron and Pegatron. The larger share of Foxconn is because it has a much bigger plant than the other two. However, with time Tata Electronics will be able to scale up and increase its share, analysts said. Further, like Foxconn, it also has the opportunity to float other subsidiary units to take contract manufacturing of other global electronics brands.

Industry insiders said Tata Electronics has initiated measures to increase its workforce to reach Foxconn’s level of 40,000 employees.

“It’s only a matter of time before Tata overtakes Foxconn in headcount,” remarked a senior staffing firm executive involved in the company’s recruitment efforts. It has mirrored Foxconn’s workforce scaling model, offering perks like dormitories, meals, and transportation.

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Tata Electronics and Apple India did not respond to a detailed questionnaire from FE.

Neil Shah, co-founder of Counterpoint Research, feels Tata Electonics’ approach to the electronics manufacturing services (EMS) sector is more holistic than that of other players.

This is because it is building its own semiconductor fabrication facility, along with capabilities for assembling and testing semiconductor chips. They already produce components for iPhones and are now scaling their complete device assembly operations. Moreover, they sell these devices through their retail chain, Croma.

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“Tata Group’s portfolio spans manufacturing, services, software, hardware, components, and even chips in the future, which sets them apart,” he added.

“Tata Electronics may be making a larger play for contract manufacturing of electronics and not just for Apple. Considering the group’s synergies, it is well poised to service a larger market for electronics and components within the Tata umbrella and beyond it,” Pareekh Jain, chief executive of EIIRTrend, a tech-focussed information platform offered.

As reported by Fe, Apple’s iPhone exports touched Rs 60,000 crore within the first seven months (April-October) of the current fiscal. This translates into nearly $7 billion of exports at an average of $1 billion per month for the first time in any fiscal year by any company.

Apple is not just exporting iPhones 14, 15 and 16 from India, but in fact — for the first time — Pro and Pro Max models after it started producing iPhones 16 Pro and Pro Max in India in October this year. The dollar value of Pro and Pro Max models is nearly 1.5-2 times higher than other iPhone models.

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