Tata Electronics, a venture of Tata Sons, has acquired 100% of Wistron Infocomm Manufacturing (India), an iPhone supplier, with the approval of the Competition Commission of India (CCI). This deal will boost Tata’s presence in the smartphone manufacturing sector and strengthen its partnership with Apple.
Introduction
Tata Electronics, a greenfield venture of Tata Sons Private Limited, has acquired 100% of the equity share capital of Wistron Infocomm Manufacturing (India) Private Limited, an electrical and electronics manufacturing company engaged in electronic manufacturing services for smartphones in India. The deal was approved by the Competition Commission of India (CCI) on January 24, 2024.
Background
Wistron Infocomm Manufacturing (India) Private Limited is a subsidiary of Taiwan-based Wistron Corporation, one of the major suppliers of Apple’s iPhones. The company operates a plant in Karnataka, where it assembles iPhone SE and iPhone 12 models. The plant was vandalized by workers in December 2020 over wage issues, leading to a temporary suspension of operations.
Tata Electronics Private Limited is a new entity established by Tata Sons Private Limited, the holding company of the Tata group. The company manufactures smartphone enclosures, which are the frames of the phones on which other components or sub-assemblies of a smartphone are assembled. The company is also reportedly planning to set up a plant in Tamil Nadu to produce camera modules for Apple.
Rationale
The acquisition of Wistron Infocomm Manufacturing (India) Private Limited by Tata Electronics Private Limited is expected to benefit both parties in terms of synergies, economies of scale and market access. The deal will also enhance Tata’s presence in the smartphone manufacturing sector, which is one of the fastest-growing segments in India. According to a report by Counterpoint Research, India’s smartphone shipments grew by 82% year-on-year in Q3 2021, reaching 62 million units.
The deal will also strengthen Tata’s partnership with Apple, which is looking to diversify its supply chain and increase its local sourcing in India. Apple has been expanding its production capacity in India through its suppliers such as Foxconn, Pegatron and Wistron. The company has also started selling its online store in India in September 2020 and plans to open its first physical store in Mumbai in 2022.
Conclusion
The acquisition of Wistron Infocomm Manufacturing (India) Private Limited by Tata Electronics Private Limited is a significant development in the smartphone manufacturing industry in India. The deal will boost Tata’s capabilities and competitiveness in this sector and enable it to leverage its existing relationship with Apple. The deal will also benefit Apple by providing it with more local sourcing options and reducing its dependence on China.