Foxconn Hon Hai, an India-based corporate entity owned by the Taiwanese electronics major,
makes Apple phones – including the iPhone 14 – at its facilities in the electronics corridor in Sriperumbudur. Currently, these units employ close to 15,000 workers, most of whom are women.
A senior official aware of Foxconn’s plans told ET that the total headcount at these units could exceed 70,000 over the next 18 months. This points to a massive increase in recruitment requiring a matching increase in accommodation facilities for the new employees.
“A 20,000-bed hostel should be ready in about ten months,” said the person cited above who was speaking on the condition of anonymity.
“Both the hostels are under construction and between the two, it will be large enough to house around 60,000 people,” said a second source.
Earlier, Foxconn had also agreed to take up at least 75% of capacity at a 20,000-bed dormitory that Tamil Nadu State Industries Promotion Corp is building at an industrial cluster in the same district but located at a distance from the Apple plants.
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People in the know said the Taiwanese major is also constructing two new manufacturing facilities at its campus where smartphones are produced.
Mails sent to Foxconn and Apple remain unanswered till press time Thursday.
This model of having living quarters for workers near to the Foxconn factory, with provisions for food and medicine managed by the company, is one that the Taiwanese manufacturer had followed in China.
Analysts are of the view that Foxconn building worker dormitories in India does not immediately imply that it is wholly importing the China model. It is, “just an emulation of one part of a strategy that worked elsewhere,” said Prachir Singh, Senior Research Analyst at Counterpoint.
Global manufacturers devise country-specific strategies when they expand beyond their home geography, to suit local labour laws, work culture and people practices. But they would “adapt to the local environment rather than import a model they’ve perfected elsewhere,” Singh added.
ET had reported in its December 6 edition that
India is set to emerge as a major hub for iPhone manufacturing as Apple looks to diversify production units outside China. Industry executives and analysts expect the percentage of locally made iPhones to rise to over a fifth of total output in value in the next three to four years, from the current level of 5%.
Earlier this month,
Foxconn announced an infusion of $500 million into its India unit. As per a stock exchange filing in Taiwan, Foxconn said its Singapore subsidiary is deploying the capital into the India entity, Hon Hai Technology India Mega Development Private Limited. Most of this is expected to go towards expansion of its smartphone production capacity in India.
Apple
began assembling the iPhone 14 models in India in late September. It has reported climbing profits and sales from India even as it cuts the lag in its India plants putting together the latest releases. iPhone 14 was introduced into the Indian assembly line weeks after global launch.
Apple executives said in their September quarter earnings call that
iPhone revenue scaled new peaks to touch $42.6 billion. They said the company had scaled a new record with its India revenue “near-doubling” in the sequentially previous quarter. The focus on expanding its manufacturing in India gained pace after supply chain constraints emerged through the June quarter on the back of strict Covid policies and worker unrest at Foxconn’s China-based factories.
In December 2021, Apple had placed the Foxconn plant in Chennai on probation,
after a charge of food poisoning at the hostels led to protests at the plant
and its temporary closure. ET had reported that the infrastructure at the hostels – which housed almost 12,000 of its workers at the time –
was being upgraded at a feverish pace and that Apple had mandated that the living conditions of the hostels of the company were to be improved significantly.
For Apple, having many of its main contract manufacturers — Foxconn, Wistron and Pegatron — operational in India, is viewed as part of a larger game plan to broaden its supply chains beyond China. Tamil Nadu in particular is fast becoming an iPhone manufacturing hub with Foxconn and Pegatron being operational here. Apple is also outsourcing the manufacturing of iPhone enclosures to Tata Electronics, which has a plant at Hosur, on the TN-Karnataka border.
India is planning to
make changes to its labour regulations in order to facilitate global manufacturers to set up large units that employ between 40,000 and 100,000 employees.
Communications & IT minister Ashwini Vaishnaw had earlier said that he had discussed the issue of setting up manufacturing units, with a footprint of over 40,000 and up till 1 lakh, with the labour minister. The labour ministry is in the process of making these changes.
The discussions have revolved around resolving labour, regulatory, housing and industrial zone issues. For example, such a large labour force cannot travel to work daily. It needs to be housed on campus, with the requisite facilities. Vaishnaw had pointed out that campus housing as desired by the industry is not permitted under current laws.
In China, which is the hub of global electronics manufacturing, there are factories with as many as 400,000 people living on the premises.
The industry has sought a housing or dormitory policy for such industrial units.
