Apple eyes Indian chipmakers for iPhone component assembly, packaging: Report

Apple has reportedly begun preliminary talks with Indian chipmakers to assemble and package iPhone components, according to a report by the Economic Times on Wednesday, citing sources familiar with the discussions.

This is the first time Apple is considering assembling and packaging some chips in India, the report said. It is not yet clear which chips will be packaged at the Sanand facility in Gujarat, but they are likely to be display-related chips.

As per the report, Tim Cook-led Apple held discussions with Murugappa Group-owned CG Semi, which is building an outsourced semiconductor assembly and test (OSAT) facility in Sanand.

Apple aims to shift manufacturing to India

Apple has been looking to shift the manufacturing of all iPhones sold in the US to India by the end of 2026. It is now speeding up those plans with the aim to offset potentially higher tariffs in China, its main manufacturing base, Reuters reported in April.

According to an earlier FT report, Apple is seeking to double iPhone production in India to 80 million units to meet the demand of 60 million iPhones to be sold in the United States by 2026.

Why Apple wants to shift

In April, the US administration imposed a 26% tariff on imports from India, far lower than the more than 100% levied on Chinese goods at the time. Washington has since paused most duties for three months, except those on China.

Soon after President Trump's tariff announcement, Apple had a sharp loss of around $700 billion in market value. As a result, the US government exempted electronic items like smartphones from the tariffs, which came as a relief for the smartphone giant.

Even before the tariffs were introduced, Apple had been urging its suppliers from China, Japan, Taiwan and other countries to establish manufacturing facilities in India. Several key partners had already begun production in the country, including Sunwoda for battery packs, Foxlink for cables, and Aequs for device cases.

Why is Apple not manufacturing its products in the US?

Lower-cost skilled labour and the presence of well-established, precision-engineered product supply chains have been key factors drawing Apple to manufacturing hubs in China and, increasingly, India for manufacturing iPhones.

In contrast, manufacturing and labour costs in America are significantly higher, making component sourcing far more expensive and less competitive for consumer electronics like the iPhone, Mint reported in May.