In depth harm from a fireplace at Tata Group’s Apple iPhone part plant in southern India may hamper manufacturing forward of a festive season gross sales surge, an trade watcher and a supply stated, forcing the US agency’s suppliers to rearrange important elements from China or elsewhere.
The weekend blaze has prompted an indefinite manufacturing halt at Tata’s Hosur plant in Tamil Nadu, the one Indian provider of iPhone again panels and another elements for each contract producer Foxconn within the nation and its personal iPhone meeting at one other plant.
Hong Kong-based Counterpoint Analysis informed Reuters it estimates native gross sales of 1.5 million models of iPhone 14 and 15 fashions in the course of the Indian festive season which runs from late October to early November, with Apple struggling to fulfil as a lot as 15 p.c of that demand as a result of hearth.
“There shall be a 10-15 p.c affect on manufacturing of older iPhone fashions from India. Apple may offset that affect by importing extra parts, and by re-routing extra export stock in direction of India,” stated Neil Shah, a co-founder of Counterpoint, which has for years tracked Apple’s world shipments.
Aside from native gross sales, Tata, one in all India’s greatest conglomerates, additionally exported iPhones to the Netherlands and United States in addition to some elements to China, price greater than $250 million (roughly Rs. 2,095 crore) general, within the yr to August 31, commercially accessible customs information exhibits.
Tata declined to remark.
Apple suppliers sometimes carry a three- to four-week inventory of again panels, Counterpoint stated. An trade supply with direct information of the matter estimated, nonetheless, that Apple was prone to have inventory for eight weeks, and due to this fact wouldn’t see a direct affect.
Nonetheless, they added that if the manufacturing suspension continues, the US firm may arrange one other meeting line in China or add shifts there to safe elements for India’s iPhone producers.
Provide chain disruptions extra typically have solid a shadow over Prime Minister Narendra Modi’s drive to draw international buyers to “Make in India”, particularly within the electronics sector.
Apple has been diversifying past China however final yr separate hearth incidents in India prompted suppliers Foxlink and Pegatron to briefly halt operations, with authorities discovering a lot of the hearth security gear at Foxlink’s facility was not useful. Contractors Wistron and Foxconn have additionally been hit by labour unrest lately.
“These are non permanent setbacks,” stated Prabhu Ram, vice chairman at Cybermedia Analysis. “Continued efforts to enhance security and operational requirements are essential for strengthening India’s place as an rising world electronics manufacturing hub.”
Tata is amongst Apple’s latest suppliers in India, which analysts estimate will contribute 20-25% of whole world iPhone shipments this yr, up from 12-14 p.c final yr.
The hearth-hit plant employed 20,000 staff. One other unit in the identical Tata complicated was because of begin making full iPhones later this yr and it’s unclear if the incident will trigger this to be delayed.
Tata has one other iPhone plant close to Bengaluru, which it acquired from Wistron final yr, and a second one in Tamil Nadu close to Chennai, which it’s set to amass from Pegatron.
© Thomson Reuters 2024
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