Apple sets sights on India for iPhone battery production in major supply chain shift

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6th December 2023 – (Cupertino) Apple Inc., the world’s most profitable enterprise, is reportedly steering its battery procurement strategy towards India for the imminent iPhone 16, marking a significant shift in its global supply chain, as it seeks to reduce its manufacturing reliance on China. This information comes from two individuals closely involved with the company.

The Silicon Valley titan has allegedly expressed to its component providers a preference for sourcing batteries for its forthcoming flagship smartphone from Indian production facilities. This move signals Apple’s intention to diversify its supply chain, a strategy that has gained momentum amidst escalating trade tensions between the U.S. and China.

Prominent battery manufacturers like China’s Desay have reportedly been encouraged to set up shop in India. Likewise, Simplo Technology, a Taiwanese battery supplier for Apple, has been asked to ratchet up its production capacity in India in anticipation of future orders, according to three people privy to these developments.

“Should the iPhone 16 battery supply chain transition smoothly, Apple is planning to shift even more iPhone battery manufacturing to India,” revealed an insider close to the organisation.

In a parallel development, an Indian government minister earlier this week confirmed that TDK, Apple’s Japanese supplier, is building a sprawling 180-acre facility in Manesar, Haryana. This new site is expected to produce battery cells for iPhones assembled in India. Rajeev Chandrasekhar, the Minister of State for Electronics and IT, shared on social media his congratulations to Apple, TDK, and local authorities for their efforts towards realising the government’s ambition of expanding India’s electronics manufacturing ecosystem.

Companies like Desay and Simplo typically package the electric cells produced by TDK and similar firms into modules, which are then shipped to assembly partners like Foxconn.

Apple’s endeavour to shift its manufacturing and supply chains away from China has been ongoing for several years. Recently, the company has been making strides to expand production in India and Vietnam but has encountered challenges in matching the scale, speed and, occasionally, the quality of its Chinese operations.

Apple’s latest endeavour to obtain batteries outside China is congruous with the Indian government’s “Make in India” initiative. This national campaign offers incentives to companies investing in targeted sectors, including mobile phones and batteries.

Apple manufactured its recent iPhone 15 model in both India and China, employing Taiwanese contract manufacturers Foxconn, Pegatron, and Wistron. Wistron has since sold its mobile phone plant outside Bengaluru to India’s Tata.

Foxconn, Apple’s principal supplier, has recently announced plans to pour over $1.5bn into a new production facility in India, further underlining the tech giant’s commitment to diversify its supply chain and embrace India’s manufacturing capabilities.