Apple Inc. (AAPL) is actively seeking partnerships with Indian semiconductor manufacturers, including Micron and Tata Group, to secure components for its iPhones assembled locally. This strategic move comes as Apple aims to significantly expand its Indian iPhone production, reaching 26% of its global output by 2026.
According to a report by Financial Express, Apple’s demand for semiconductors is projected to hit a staggering $12 billion by 2026. If Micron and Tata Group’s chip fabrication facilities, slated to be operational by then, can produce the necessary semiconductor grades, they could secure substantial contracts from Apple, the world’s largest company.
This development underscores Apple’s commitment to the Indian market and its desire to diversify its supply chain. Apple’s spending on Indian-made microchips is anticipated to surpass that of any other company in sectors like defense, aviation, and automotive. In Fiscal Year 2024, Apple manufactured iPhones worth $14 billion in India, accounting for nearly 14% of its global iPhone production.
The company’s global semiconductor consumption has witnessed a remarkable surge, more than tripling from $18.8 billion in 2011 to approximately $72 billion today. Apple commenced iPhone production in India in 2021 through its Taiwanese manufacturing partners, capitalizing on the government’s smartphone production-linked incentive scheme.
Furthermore, the Indian government launched a $10 billion incentive scheme in 2022 to encourage domestic semiconductor production. To date, five chip projects valued at around $18 billion have received approval under this scheme, leaving approximately $1.2 billion for future endeavors. This initiative highlights India’s ambition to become a major player in the global semiconductor landscape.
Apple’s pursuit of Indian chipmakers signifies the growing importance of the Indian market for global technology giants. The potential for Indian semiconductor manufacturers to contribute significantly to Apple’s supply chain highlights the burgeoning technological capabilities of India, positioning it as a key player in the global electronics industry.
