Significant damage resulting from a fire at Tata Group’s Apple iPhone component facility in southern India may disrupt production just before a surge in sales for the festive season, according to an industry analyst and a source. This situation compels the US company’s suppliers to source essential components from China or other locations.
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India is slowly falling out of favours with manufacturers like Apple and Samsung.
Poor infrastructure, low productivity rate and even big companies like Tata can have fire at their factory!https://t.co/3Fa3FhkZTH pic.twitter.com/pULAlywRPM
— Ignis Rex (@Ignis_Rex) October 2, 2024
The fire over the weekend has led to an indefinite suspension of operations at Tata’s Hosur facility in Tamil Nadu, which is the sole Indian supplier of iPhone back panels and various other components for both the local contract manufacturer Foxconn and Apple’s own assembly operations at a different site.
Counterpoint Research, based in Hong Kong, informed Reuters that it anticipates local sales of approximately 1.5 million units of the iPhone 14 and 15 models during the Indian festive season, which spans from late October to early November.
However, Apple is facing challenges in meeting up to 15 percent of that demand due to the impact of the fire.
There is expected to be a 10-15 percent effect on the production of older iPhone models originating from India. According to Neil Shah, a co-founder of Counterpoint, which has monitored Apple’s global shipments for several years, Apple may mitigate this impact by increasing the importation of components and redirecting a greater volume of export inventory to India.
In addition to local sales, Tata, one of the largest conglomerates in India, has also exported iPhones to the Netherlands and the United States, along with certain components to China, amounting to over $250 million in total for the year ending August 31, as indicated by commercially available customs data.
Typically, Apple suppliers maintain a stock of back panels for three to four weeks, as noted by Counterpoint. However, an industry source with direct knowledge of the situation estimated that Apple likely possesses stock sufficient for eight weeks, suggesting that there would not be an immediate impact.
A massive fire broke out at Tata’s iPhone plant on Saturday morning in Tamil Nadu’s Krishnagiri. The fire started in the mobile phone accessories painting unit of the company around 5.30 am.
Several workers were on duty at the plant when the fire broke out.#fire #smoke… pic.twitter.com/Pl1B0Sq4tK
— India Today NE (@IndiaTodayNE) September 28, 2024
Apple has been expanding its operations beyond China; however, last year, distinct fire incidents in India led to a temporary suspension of activities by suppliers Foxlink and Pegatron.
Investigations revealed that a significant portion of the fire safety equipment at Foxlink’s facility was inoperative. Additionally, contractors Wistron and Foxconn have experienced labor disputes in recent years.
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