iPhone supplier announces big expansion of India business

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NEW DELHI: In a big boost to Prime Minister Narendra Modi’s ‘Aatmanirbhar Bharat’ initiative towards making the country an electronics manufacturing hub, Wistron Corp of Taiwan has partnered with Optiemus Electronics to build products such as smartphones and laptops, among others.

Optiemus Electronics, in a regulatory filing, stated that it “signed an MoU on a Strategic Partnership to form a unique alliance to strengthen the ties with the $30 billion Taiwan Headquartered Wistron Corporation’s Indian subsidiary Wistron Infocomm Manufacturing (India) to manufacture mobile devices, IT hardware and Automotive- EV products.”

Apart from manufacturing mobile phones, the alliance will also work towards design and manufacturing of tablets, laptops, hearables/wearables, telecom products, IoT/Industrial IoT, smart meters/devices and automotive-EV products.

As part of the deal, both the companies will also work towards creating a joint hub in India for Design Solutions Product Development apart from bringing smart manufacturing to India.

Wistron, Optiemus will invest roughly $200 million to ramp up electronics manufacturing in the next three to five years, the two companies said.

The partnership is expected to yield revenues of 38,000 crore over five years for Optiemus, the company said, adding that it plans to hire roughly 11,000 workers for its two plants on the outskirts of New Delhi. It has a workforce of just about 300 now.

“Wistron wants to grow its footprint in India, Optiemus wants to leverage the government initiatives (in electronics manufacturing)… so it makes sense to come together from a win-win point of view,” Optiemus managing director A Gururaj, who once led Wistron in India, told news agency Reuters.

The success of India’s electronics manufacturing sector is key to PM Modi’s ambition of turning the country into the factory of the world, like neighbouring China.

To boost exports, Modi has announced production linked-incentive (PLI) programmes that pay manufacturers for sales of locally made goods.

Although foreign companies need to make phones and laptops above a certain value to get PLI benefits, there is no such threshold for Indian companies.

That means Wistron and Optiemus, which have won PLI approvals for smartphones and IT products, can make cheaper products and still get the government incentives.

“Optiemus is very advanced discussions with a large global company to make smartphones,” said Gururaj, declining to name the client, reported Reuters.

Optiemus Electronics Limited shares on Tuesday was trading 4.98% higher at 148.65 apiece on BSE at the time of writing the report.

EXPANSION PUSH

The Wistron-Optiemus partnership is also key to Wistron’s business ambitions in India, which have so far rested largely on Apple, its key client in the South Asian nation.

Wistron entered India in 2015 by buying a minority equity stake in Optiemus in a partnership that assembled devices for brands including Taiwan’s HTC and South Korea’s LG. Wistron has since sold its equity back to Optiemus.

In 2017, Wistron began assembling iPhones in a small plant in the southern tech hub of Bengaluru and has since expanded to a much bigger factory in Karnataka state’s Narasapura industrial area.

Worker discontent over unpaid wages led to a riot at the Naraspura factory late last year, leading Apple to put Wistron on probation.

“Wistron’s partnership with Optiemus will help it scale and diversify manufacturing in India to other products beyond smartphones phones and key client Apple as well as assemble devices locally for other global clients,” said Neil Shah of Hong Kong-based tech analytics firm Counterpoint Research.

Apart from being a key Apple supplier, Wistron also makes laptops for Dell, Xiaom, Acer and Intel-based servers.

With inputs from agencies

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