New Delhi:

Tata Electronics has agreed to buy a majority stake in Taiwanese contract manufacturer Pegatron’s only iPhone plant in India, forming a new joint venture that strengthens Tata’s position as an Apple supplier, two sources told Reuters.

Under the deal announced internally last week, Tata will hold 60% and run daily operations under the joint venture, while Pegatron will hold the rest and provide technical support, said the two sources, who declined to be named as the details are not yet public.

The sources did not elaborate on the financials of the deal.

Tata declined to comment, while Apple and Pegatron did not respond to Reuters queries on Sunday.

Reuters was the first to report in April that Pegatron had the backing of Apple and was holding advanced talks to sell its only iPhone plant in India to Tata, marking the Taiwanese firm’s latest scale back of its Apple partnership.

Apple is increasingly looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington. For Tata, the Chennai Pegatron plant will bolster its iPhone manufacturing plans.

Tata has been fast expanding into iPhone manufacturing, rivaling the only other iPhone contract manufacturer operating in India, Foxconn.

The announcement for the deal’s closure was made internally at the iPhone plant on Friday, said the first source. The second source said the two companies plan to file for an approval of the Competition Commission of India (CCI) in the coming days.

Tata already operates an iPhone assembly plant in Karnataka, which it took over from Taiwan’s Wistron last year. It is also building another in Hosur in Tamil Nadu, where it also has an iPhone component plant which was involved in a fire incident in September.

Analysts estimate India will contribute 20-25% of total iPhone shipments this year, from 12-14% last year.

The Tata-Pegatron plant, which has around 10,000 employees and makes 5 million iPhones annually, will be Tata’s third iPhone factory in India.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

File picture of semiconductor equipment on display
| Photo Credit: Reuters

Tata Electronics, a wholly owned subsidiary of Tata Sons Pvt. Ltd, said it had completed the Definitive Agreement with Powerchip Semiconductor Manufacturing Corporation (PSMC) of Taiwan towards establishing semiconductor manufacturing facilities (aka fabs) in India.

As per the agreement, PSMC will provide design and construction support to build India’s first AI-enabled greenfield fab in Gujarat, license a broad portfolio of technologies and provide engineering support to successfully transfer licensed technologies to the Gujarat fab. 

 This fab will have manufacturing capacity of up to 50,000 wafers per month and will include next-generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency. 

The new semiconductor fab will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic, addressing the growing demand in markets such as AI, automotive, computing and data storage, and wireless communication, Tata Electronics said in a statement. 

With a total investment of up to ₹91,000 crores ($11 billion), the fab will create over 20,000 direct and indirect skilled jobs. 

With this fab, India for the first time will be able to address the growing chip demand of domestic and global customers. Tata Group’s multi-fab vision for Dholera is projected to create over 1,00,000 skilled jobs, the company said.

N. Chandrasekaran, Chairman, Tata Sons in a statement said, “This collaboration is a key milestone, and I am confident that our comprehensive technology partnership with PSMC will pave the way for innovation, drive growth, and strengthen the global semiconductor supply chain. It will position us to play a key role in the growing semiconductor market to serve global customers.”

Frank Huang, Chairman of Powerchip Group and CEO of PSMC, said, “This partnership represents a win-win situation, as it positions PSMC and the Taiwanese ecosystem to gain a significant first-mover advantage in the rapidly expanding Indian market while helping India achieve self-reliance in semiconductor manufacturing.”

“I strongly believe that our partnership will be foundational to the India-Taiwan collaboration in semiconductors and will inspire more commercial and strategic tie-ups between the two sides,” he said.

Tata Electronics said it has already engaged two design firms from Taiwan to create a top-tier fab that adheres to global standards of quality, safety, and sustainability.