iPhone maker Foxconn plans to build a new $700 million plant in Bengaluru

Apple Inc.’s partner Foxconn Technology Group plans to invest around $700 million in a new plant in India to boost local manufacturing, people familiar with the matter said, underscoring an accelerated shift in manufacturing away from China as tensions rise between Washington and Beijing.

The Taiwanese company, which is also known for its flagship unit Hon Hai Precision Industry Co., plans to build the iPhone parts manufacturing facility on a 300-acre site near the airport in Bengaluru, according to the people involved asked not to be named as the information is not public. The factory could also assemble Apple’s phones, some of the people said, and Foxconn could also use the site to produce some parts for its burgeoning electric vehicle business.

The investment is one of Foxconn’s largest single investments in India to date and underscores that China is at risk of losing its status as the world’s largest consumer electronics maker. Apple and other US brands are leaning on their China-based suppliers to explore alternative locations like India and Vietnam. It’s a rethinking of the global supply chain, accelerated during the pandemic and war in Ukraine, that could reshape the way electronics are made around the world.

The new production facility in India is expected to create around 100,000 jobs, it said. The company’s sprawling iPhone assembly complex in the Chinese city of Zhengzhou currently employs around 200,000 people, though that number spikes during peak production seasons.

Production at the Zhengzhou plant collapsed ahead of the year-end holiday due to Covid-related disruptions, prompting Apple to review its China-dependent supply chain again. Foxconn’s decision is the latest move that suggests suppliers could shift capacity out of China much faster than expected.

Plans may change as Foxconn is in the process of finalizing investment and project details, the people said. It’s also unclear whether the plant represents new capacity or production that Foxconn is shifting from other locations such as its Chinese facilities.

Apple declined to comment. Hon Hai, whose chairman Young Liu met Prime Minister Narendra Modi this week, did not immediately respond to an email seeking comment. The Karnataka government did not respond either. Liu, who is touring in India, has dedicated himself to another manufacturing project in neighboring Telangana.

Foxconn’s decision would be a coup for Modi’s government, which sees an opportunity to close India’s technology gap with China as Western investors and companies sour Beijing’s crackdown on the private sector.

India has offered financial incentives to Apple suppliers like Foxconn, which started manufacturing the latest generation of iPhones at a site in Tamil Nadu last year. Smaller competitors Wistron Corp. and Pegatron Corp. have also gained a foothold in India, while suppliers like Jabil Inc. have started manufacturing components for AirPods locally.