Foxconn, Apple's biggest supplier contractor, has invested $500 million in its Indian subsidiary.
According to South China Morning Post, this is part of the Taiwanese manufacturing giant's move to diversify its supply chain after the stringent pandemic controls in China that disrupted production at the company's key iPhone factory in Zhengzhou.
Disruption at iPhone City Prompted Foxconn to Diversify Supply Chain
The investment into Foxconn Hon Hai Technology India Mega Development Private Limited was made through Foxconn's Singapore unit, Foxconn Singapore Pte Ltd.
According to a filing on Thursday to Taiwan Stock Exchange, it involved the purchase of over four billion shares.
The investment into the Indian subsidiary came as production at Foxconn's Zhengzhou plant has been severely hampered due to the resignation of thousands of employees and workers' protests that turned violent.
The Zhengzhou factory in China is the largest iPhone factory in the world. At this time of the year, the company usually hires 300,000 people in order to cope with holiday orders.
Because of the disruptions at the factory, it only utilized just 20 percent of its manufacturing capacity in November. This is based on an estimate made by Kuo Ming-chi, an analyst covering Apple at TF International Securities.
The analyst also added that it is expected that the utilization rate will rise in December, but only to between 30 and 40 percent.
With the ongoing problem at Zhengzhou, Foxconn's founder Terry Gou circulated a letter around China's leaders a month ago, urging the country to change its zero-Covid policies or risk further disrupting its key role in the global supply chain.
With all the troubles happening at Foxconn's "iPhone City," Apple has been asking suppliers to prepare to manufacture more of its products outside China, particularly in India and Vietnam, according to The Wall Street Journal.
Read Also: COVID Outbreak in China Hits Foxconn's iPhone Factory, But Impact Is 'Controllable,' Company Says
India Will Be Turned Into a Global iPhone Manufacturing Hub
Apple began assembling the iPhone 14 models in India in late September. With this, the factory in the country is producing the current iPhone lineup.
According to analysts, Apple will potentially turn India into a global iPhone manufacturing hub by 2025 as the Cupertino tech-giant cuts its reliance on China.
For over a decade, the Chinese factory has been producing the vast majority of its devices, as per TechCrunch.
According to a September report by JP Morgan analysts, Apple is planning to move five percent of the global iPhone 14 production to India by late 2022.
Moreover, the analysts said that the company is planning to expand its manufacturing capacity in India to produce 25 percent of all iPhones by 2025.
Meanwhile, in a report by Morgan Stanley analysts on Wednesday, they offered many similar estimations, saying that Apple's goal is to have India "contribute up to 10% of total iPhone production in 2-3 years."
Recently, Foxconn also signed a memorandum of understanding with the Indian state of Gujarat. This will set up a $20 billion semiconductor and display unit in the coastal state.
According to Foxconn, the company will bring technical expertise to the venture. Meanwhile, Vedanta, known for its mining business, will finance the project, according to top officials said.
Related Article: Apple iPhone Maker Foxconn Refutes a Claim From a Video Alleging Covid Deaths at China Factory; Investigation Concluded It's 'Maliciously Edited'
