Cyclone Michaung Forces Foxconn and Pegatron to Halt iPhone Production in Chennai Amid Heavy Rain
Three points you will get to know in this article:
- Cyclone Michaung halts iPhone production at Foxconn and Pegatron facilities in Chennai, impacting major electronics hubs and prompting closures.
- Foxconn expands in India, achieving record iPhone shipments, with plans to double employment and investment and establish new facilities in Karnataka.
- Pegatron faces a second factory closure, and plans a second manufacturing facility in India, while Foxconn targets India as a potential EV manufacturing hub.
Adverse weather conditions caused by cyclone Michaung have temporarily halted the production of Apple iPhones at the manufacturing plants near Chennai, operated by Taiwan’s Foxconn and Pegatron. This delay, resulting from heavy rainfall, has affected the city’s crucial electronics and manufacturing hub. The downpour has led to submerged cars and forced the closure of the airport, impacting various aspects of daily life.
Foxconn’s Expansion in India Aligns with Apple’s Production Strategy
Foxconn has significantly expanded its presence in India by investing in manufacturing facilities in the southern region. This strategic move aligns with Apple’s broader plan to diversify its production capabilities beyond its traditional base in China. Despite the current weather-related challenges, both Foxconn and Pegatron remain committed to contributing to India’s growing role in the global electronics manufacturing landscape.
Apple Achieves Record Shipments from India in Q3
In the period concluding in September, Apple notched up its all-time best quarterly shipments in India, surpassing a remarkable 2.5 million units, as revealed by insights from market analytics firm Counterpoint Research.
Foxconn Plans to Resume Production After Cyclone Impact
At the bustling iPhone factory in Tamil Nadu, where approximately 35,000 dedicated individuals contribute their skills, Foxconn is contemplating a restart of production slated for Tuesday, December 5.
Meanwhile, Pegatron finds itself grappling with its second factory shutdown in recent months, the last being a disruption in iPhone assembly caused by a fire in September. After the unfortunate fire incident, Pegatron had to temporarily halt the assembly of iPhones.
Pegatron in Talks for Second Manufacturing Facility in India
In an exciting development, Pegatron is actively exploring the creation of a second manufacturing hub in India specifically dedicated to putting together the newest iPhones. This move follows a larger trend seen among Apple’s trusted manufacturing partners like Wistron and Foxconn, who are making substantial investments in India to broaden their production capabilities.
Currently contributing about 10% to Apple’s yearly iPhone production in India, Pegatron is a key player in the tech giant’s manufacturing ecosystem, as highlighted by Counterpoint.
On the upcoming Tuesday morning, Cyclone Michaung is poised to hit the southern coast of Andhra Pradesh, unleashing sustained winds ranging from 90-100 kph (56-62 mph), with gusts potentially reaching up to 110 kph, according to the country’s weather office.
Foxconn’s Significant Investments and Expansion in India
In recent news, Foxconn’s Indian branch, Foxconn Hon Hai Technology India Mega Development, has greenlit an additional $1.6 billion (INR 12,820 Cr) for ongoing construction projects. This strategic move reflects the company’s proactive approach to diversifying its production beyond China, a decision influenced by the ongoing tensions between Beijing and Washington.
Simultaneously, Foxconn is rapidly advancing its plans for a $700 million facility on the outskirts of Bengaluru, spanning an expansive 300 acres. This ambitious venture is positioned to emerge as the newest iPhone manufacturing hub in India, aligning seamlessly with the company’s broader strategy for global manufacturing diversification.
Foxconn’s Ambitious Targets for Growth and Expansion in India
Foxconn has set an impressive goal of doubling its workforce, investments, and overall business scale in India within a year.
Highlighting its commitment, the company has earmarked an additional $600 million for the development of two facilities in Karnataka. Notably, Foxconn’s Indian division has achieved a remarkable $10 billion in annual turnover by the second quarter of 2023, signaling substantial growth in revenue, employment, and investments.
Foxconn’s Focus on India as a Global Hub for Electric Vehicle Manufacturing
Emphasizing its strategic focus on India, Foxconn is eyeing the country as a potential third global hub for electric vehicle contract manufacturing. The ambitious plan includes targeting the production of 500,000 to 700,000 electric vehicles by 2025. Furthermore, Foxconn aims to broaden its Apple product portfolio and boost production activities in India, aligning with its broader expansion strategy.
The impact of Cyclone Michaung led Foxconn and Pegatron to halt iPhone production near Chennai. Foxconn’s expansion in India aligns with Apple’s diversification strategy, resulting in record shipments in Q3. With plans to resume production post-cyclone, Foxconn’s ambitions include substantial investment and doubling its India operations. Pegatron faces its second factory closure and aims to establish a new facility for iPhone assembly. Foxconn’s significant financial allocation and strategic focus on India further underline its commitment, positioning the country as a potential hub for electric vehicle manufacturing and expanded Apple product production.
