Foxconn to make Apple AirPods in Telangana

Foxconn has won an order to make AirPods for Apple Inc and plans to build a factory in Telangana to produce the wireless earphones

Hyderabad: Taiwanese contract manufacturer Foxconn, who recently signed a Memorandum of Understanding with the Government of Telangana to establish a manufacturing plant here, has won an order to make AirPods for Apple Inc and plans to build a factory in Telangana to produce the wireless earphones.

According to an exclusive report published by Reuters, the deal would see Foxconn, the world’s largest contract electronics maker and assembler of around 70 percent of all iPhones, become an AirPod supplier for the first time. The move underlines efforts by the key Apple supplier to further diversify production away from China. AirPods are currently made by a range of Chinese suppliers. Reuters also quoted a source saying that Foxconn would ‘invest more than $200 million in the new India AirPod plant in the southern Indian state of Telangana’.

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Earlier this month, in one of the biggest deals in the country and one that reaffirmed Telangana’s standing as the top investment destination in the country, Foxconn had signed a MoU with the State government to establish a manufacturing facility here. The unit was expected to create one lakh direct and indirect employment for youth in the State over a period of 10 years. A Foxconn delegation led by its chairman Young Liu had called on Chief Minister K Chandrashekhar Rao, after which the MoU was signed.

As for the Apple Airpods deal, the Reuters report said Foxconn officials had debated internally for months about whether to assemble AirPods due to relatively lower profit margins on making the device, but ultimately opted to go ahead with the deal to ‘reinforce engagement’ with Apple.

The decision to set up production in India was requested by Apple, according to the report, which also said that a subsidiary, Foxconn Interconnect Technology Ltd, had plans to start construction of a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024.

There were reports earlier that said Apple had asked suppliers including Foxconn to make AirPods in India, but details including the size of investment, timeline and which suppliers have manufacturing plans in the country were disclosed.

Apple and its key suppliers have been shifting production away from China, where strict Covid-19 curbs disrupted Foxconn’s biggest iPhone factory last year. They were also seeking to avoid a potential hit to business from mounting Sino-US trade friction, the report said, also pointing out a Foxconn statement on Wednesday that it would ramp up investment outside China to meet customer demand and lower its reliance on China for production.

Foxconn is already producing Apple’s flagship iPhone 14 and other models at its plant in Sriperumbudur near Chennai.