Foxconn to start producing Apple Airpods in India? Here’s what the deal may look like

• Foxconn will invest more than US$200 million in the new AirPod plant in Telangana, a southern state in India.
• The move, if it materializes, will mark the Taiwanese firm’s first attempt at producing AirPods, which are currently being made by a range of Chinese suppliers.

Two weeks ago, Tech Wire Asia wrote about Foxconn and Apple’s massive plans for their expansion into India. Apple’s idea centers around gradually diversifying from China and enlarging its production footprint in India. Reliable sources have also indicated since October last year that the iPhone maker and Foxconn, its main manufacturing partner, plan on bringing AirPods and Beats production to the subcontinent.

Young Liu, the Chairman of Foxconn, also visited India earlier this month to fortify his company’s commitment to expanding electronics manufacturing capacity in India. The meeting resulted in Telangana chief minister K Chandrasekhar Rao announcing that Foxconn had signed an agreement to invest in the southern Indian state of Karnataka to manufacture electronics. 

Foxconn’s investment is expected to be the largest in India’s electronics sector and will create 100,000 jobs, Rao’s office said. The state government and Foxconn did not disclose the size of the contract manufacturer’s investment or specific products that it would make in the state. At that point in time, however, there were indications from reliable sources that the amount was earmarked at US$700 million.

However, in the latest development to this ongoing transition from China to India, Reuters has reported that Foxconn has won an order to make AirPods for Apple and plans to build a factory in India to produce the wireless earphones. Quoting two people with direct knowledge of the matter, Reuters said the deal would see the world’s largest contract electronics maker and assembler of about 70% of all iPhones become an AirPod supplier for the first time.

It underlines efforts by the key Apple supplier to diversify production further away from China. For context, AirPods are currently made by a range of Chinese suppliers. While the previous update indicates that the investment for the new plant in the southern Indian state of Telangana would be US$700 million, this time, the amount is predicted to be around US$200 million for an AirPods plant, if not more.

For months, Foxconn officials had internally debated whether to assemble AirPods due to relatively lower profit margins on making the device. Still, they ultimately opted for the deal to “reinforce engagement” with Apple. “That way, we are more likely to get orders for their new products,” the person said.

Foxconn vies with Taiwanese rivals such as Wistron Corp and Pegatron Corp to win more orders from Apple since the tech giant is actively looking for places outside of China to set up its manufacturing. The sources also told Reuters that the subsidiary, Foxconn Interconnect Technology, plans to start constructing a manufacturing facility in Telangana in the second half of this year and begin production by the end of 2024 at the earliest.

Neither Foxconn nor Apple has officially announced or commented on their plans in India. So far, Apple has started producing some iPhone models in India, including the iPhone 14. In general, Foxconn has invested US$500 million in the country to boost production capabilities.

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