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apple's supply chain in india has been impacted again.

on september 28, local time, a fire broke out at an iphone components factory owned by india's tata electronics in hosur, tamil nadu, southern india, resulting in at least 10 people receiving treatment, two of whom were hospitalized. the factory originally planned to produce complete iphones in the next few months, but production is currently interrupted and the resumption time has not yet been determined.

tata electronics is a subsidiary of the tata group, india's largest conglomerate. in november last year, tata electronics became the first indian company responsible for iphone production by acquiring the iphone assembly unit of taiwanese electronics manufacturing company wistron in india. it has also become one of apple's three contract manufacturers in india, the other two being foxconn and pegatron.

publicly reported data shows that as of march 2024, foxconn is responsible for assembling nearly 67% of iphones, pegatron has won approximately 17% of orders for iphones made in india, and the remaining approximately 16% of iphone production is sold to wistron. produced at tata electronics' factory.

some analysts believe that as an important local manufacturer of apple mobile phone parts in india, tata electronics bears the heavy responsibility of production capacity. this fire not only affects production arrangements, but may also have an impact on apple's supply chain.

this is not the first fire in apple’s indian supply chain. in february last year, a major fire incident occurred at the indian factory of foxlink, apple’s data cable supplier, which resulted in the destruction of nearly half of the machines in the factory and a loss of more than us$12 million.

in the past few years, apple has tried to transfer some of its production capacity to southeast asian countries such as vietnam and india to diversify supply chain risks. for example, in 2020, apple's production lines in india have begun manufacturing iphone 11. in june of the same year, foxconn chairman liu yangwei stated at the shareholders’ meeting that he would focus his investment on india.

in april 2022, apple ceo tim cook mentioned in a conference call that due to chip supply shortages and international situations, apple is considering deploying its supply chain to the united states, southeast asia and other regions. a year later, cook visited india and held talks with indian prime minister narendra modi, hoping to expand production and smartphone sales in the country.

this trend continues today. previously, people familiar with the matter revealed to the media that india’s assembly lines are not only assembling the entry-level iphone 16, but are also taking orders for some pro models. in the past, the latest and high-end iphones were all produced by chinese factories, and indian suppliers could only take orders for some low-end or older models. therefore, the chinese and indian factories starting to assemble the latest iphone together can be called the biggest change in apple's supply chain this year.

at that time, the indian "siliconindia" website reported that the upcoming iphone 16 pro may represent a major shift in apple's manufacturing strategy in india. at the same time, apple's production expansion in india is also seen as a positive signal for the development of india's electronics manufacturing industry, which may attract more foreign direct investment and further promote india's position in the global supply chain.

however, judging from the fire incident at a tata electronics factory, it is still difficult for indian "fruit chain" companies to make greater progress. for example, according to british media reports, at an iphone parts factory owned by the tata group, only one out of every two parts is intact and can be sent to foxconn's assembly plant.

from this point of view, apple still cannot leave china. and apple is aware of this. while it continues to support indian "fruit chain" companies, it is also frequently interacting with chinese suppliers.

according to reports, cook himself had to go to china to reorganize the supply chain because the iphone 15 assembled and produced in india last year was returned and forced to cut prices significantly. it is reported that this year, apple has transferred part of its production capacity back to foundries in mainland china. major manufacturers such as byd and luxshare precision have joined the iphone 16 supply chain and become apple's latest foundry partners.

in march this year, when the apple retail store in jing'an, shanghai officially opened, cook came to the platform and said in an interview with the media: "for apple's supply chain, i think there is no place more important than china. over the past 30 years, we have been continuously expanding our supply chain in china and increasing investment." he also appeared with relevant leaders from byd, lens technology, and changying precision, trying to break the market's shift towards apple. supply chain concerns.

in july, apple coo jeff williams came to china, and visiting supply chain companies was also an important part of the process. this time he visited two of apple's core suppliers, foxconn and lingyi intelligent manufacturing, and said: "seeing the tremendous progress made in china over the past 30 years, apple would not be successful without them."

behind this, the general consensus in the industry is that india's mid-to-high-end manufacturing capabilities are still weak, and many indicators such as yield rate are still insufficient. especially in the manufacturing of high-end equipment and materials, india still relies on china's supply chain system.

for example, ivan lam, an analyst at technology research firm counterpoint research, once said that in the next few years, the growth of india's supply chain will mainly be limited to the assembly of final products. production of more valuable electronic and mechanical components will remain concentrated in china. while india has made some progress, its efficiency, infrastructure and talent pool cannot yet match china's.

(times finance xie silin)