Apple (AAPL.O) supplier Foxconn (2317.TW) intends to quadruple the staff at its iPhone factory in India over two years, two government officials familiar with the matter said, mentioning a production adjustment as it faces disruptions in China.
Foxconn has captured headlines in recent weeks, with strict virus restrictions at its Zhengzhou facility, the world’s biggest iPhone factory, disrupting production and sparking concerns over the impact of China’s virus policy on global supply chains.
The disruptions caused Apple to slash its forecast for shipments of the premium iPhone 14 models this week, weakening its sales outlook for the peak year-end holiday season.
Taiwan-based Foxconn now intends to increase the workforce at its facility in southern India to 70,000 by adding 53,000 more employees over the next two years, said the sources, who refused to be identified as the discussions are confidential.
While the size of the facility in India’s southern state of Tamil Nadu is outclassed by Foxconn’s Zhengzhou plant, which hires 200,000 employees, it is central to Apple’s efforts to move production away from China.
Foxconn, formally called Hon Hai Precision Industry Co Ltd, started the India plant in 2019 and has been jacking up production. It started making iPhone 14 this year. Foxconn’s interest in expanding the plant is known, but the scale of the proposed expansion and timelines have previously not been disclosed.
Both Apple and Foxconn would not comment.
In that context, Foxconn Chairman Liu Young-way said on an earnings call on Thursday the company would alter its production capacity and output so there was no impact from other potential interruptions on supplies for the Christmas and Lunar New Year holidays.
Foxconn has discussed its plans with Tamil Nadu officials about expediting its hiring efforts at the Indian facility because of disruptions in China, said the first government source. Beyond iPhones, the plant also makes products for other global tech firms, but the new hiring move is largely driven by its need to satisfy increasing iPhone demand, the person added.
A person in Taiwan familiar with the matter said Foxconn was expanding its operations in India to build its capacity for basic models and to satisfy Indian demand.
“We are gradually increasing our production scale there,” the person said, refusing to provide details on its hiring plans in India.
The second government source in India, a senior official in the Tamil Nadu administration, said the state government was collaborating with Foxconn in “finalizing” the expansion.
On October 27, the state’s investment promotion arm posted on Twitter that senior government officials had visited Taiwan and met Liu. They had “elaborately discussed Foxconn’s plans for new ventures and investments” and offered the government’s backing.
The state was having discussions with the suppliers to tackle issues such as housing facilities for staff as it considers expanding, the first government official said. In 2021, Foxconn’s Tamil Nadu facility was at the centre of a mass food poisoning incident which led to employee protests and shed light on the living conditions of the staff in hostels near the factory.
Officials at Tamil Nadu, a hub of electronic and automotive manufacturing, were also forcing Apple suppliers to expand into manufacturing components for iPhones beyond just assembly, the two government sources added.
Currently, iPhones are manufactured in India by at least three of Apple’s global suppliers: Foxconn and Pegatron (4938.TW) in Tamil Nadu; and Wistron (3231.TW) in neighboring Karnataka state.
JP Morgan analysts forecast in September that Apple may manufacture one out of four iPhones in India by 2025, and 25% of all Apple products, including Mac, iPad, AirPods, and Apple Watch, will be made outside China by 2025 from 5% now.
