In a significant development for India’s electronics manufacturing sector, the Taiwanese contract manufacturer Wistron Corp. has approved the sale of its India unit, Wistron InfoComm Manufacturing (India) Pvt. Ltd., to the Tata Group for an estimated $125 million.
This deal makes the Tata Group the first Indian company to manufacture Apple iPhones, marking a major milestone in the country’s push to become a global electronics manufacturing hub.
What is the background of Wistron’s iPhone manufacturing in India?
Taiwan-based Wistron Corp has been one of the three major contract manufacturers for Apple iPhones in India, along with Foxconn and Pegatron. Wistron assembles Apple’s iPhone devices and components for these smartphones at its plants in Bengaluru and Hosur. The company has been manufacturing iPhones in India for several years as part of Apple’s push to diversify its manufacturing base beyond China.
However, Wistron had been facing challenges in its India operations. In late 2020, the Wistron plant in Karnataka witnessed trouble after workers went on a rampage due to wage-related issues. The company had to sack its vice president overseeing India business and admit that some workers were not paid correctly or on time. While operations resumed in 2021 after state government intervention, Wistron had been considering divesting its India business as early as 2020.
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Why did Wistron decide to sell its India unit?
On October 27, 2023, Wistron announced that its board had granted approval for the sale of its 100% indirect stake in subsidiary Wistron InfoComm Manufacturing (India) Pvt. Ltd. to Tata Electronics. The deal has been finalized after strategic considerations in response to the reshaping of the group’s product strategy and global manufacturing layout.
Wistron has been seeking to diversify its business beyond thin-margin iPhone manufacturing into areas such as servers. In 2020, the company had agreed to sell its iPhone production business in China to a competitor. The sale of the India unit aligns with Wistron’s strategy to optimize its global manufacturing footprint.
How much is Tata Electronics paying for Wistron’s India unit?
Tata Electronics, a wholly-owned subsidiary of Tata Sons, will be acquiring Wistron’s India unit for $125 million (approximately Rs. 1040 crore). The final transaction price will take into account adjustments and be determined based on the settlement date.
After confirmation and signing of relevant agreements by both parties, the deal will proceed to obtain necessary regulatory approvals. Following the completion of the transaction, Wistron will make the required announcements and filings in accordance with applicable laws and regulations.
What does the acquisition mean for Tata Group’s electronics manufacturing ambitions?
The acquisition of Wistron’s India unit marks a significant milestone for Tata Group’s electronics manufacturing ambitions. Tata Electronics will become the first Indian company to manufacture Apple iPhones, for both domestic and global markets.
This aligns with Tata Group’s strategy to make inroads into electronics production and leverage the geopolitical backlash against China to woo smartphone companies like Apple to alternative manufacturing sites in India. Tata has already been increasing its engagement with Apple, such as producing iPhone components at its Hosur plant and announcing plans to launch 100 Apple stores in the country.
With the Wistron acquisition, Tata Electronics will be able to move into end-to-end assembling of iPhones in India, joining the ranks of global contract manufacturers like Foxconn, Pegatron and Luxshare. This provides Tata a leg-up in its electronics manufacturing ambitions, with the possibility of producing top-end iPhone models in the near future as well.
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What is the significance of this deal for India’s electronics manufacturing ecosystem?
The Wistron-Tata deal is being seen as a major boost to India’s electronics manufacturing ecosystem and the government’s ‘Make in India’ initiative. It signals the maturing of India’s homegrown contract manufacturing capabilities, with a giant Indian conglomerate like Tata now manufacturing for a global brand like Apple.
Minister of State for Electronics and IT Rajeev Chandrasekhar hailed the deal, stating that it will spur the next cycle of investments in the Indian electronics manufacturing ecosystem. He said the government fully supports the growth of global Indian electronics companies, which will in turn attract more global brands to make India their trusted manufacturing partner.
The deal comes at a time when Apple is looking to diversify its manufacturing base beyond China to countries like India and Vietnam. Apple reportedly aims to shift 25% of its iPhone production to India by 2025. With Tata now becoming a key player in the iPhone manufacturing ecosystem, it positions India as an attractive destination in the global electronics value chain.