Tata Electronics, a prominent player in India's electronics manufacturing services (EMS) industry, is in discussions with leading tech companies like Microsoft, Dell, and HP to broaden its client portfolio and establish itself as a key player in the global EMS market.
The company aspires to emulate the success of Taiwanese contract manufacturing giant Foxconn, adopting a similar business model, as reported by The Economic Times.
Tata Electronics, which is currently focused on assembling Apple iPhones, aims to expand its portfolio. According to a source quoted in the report, working with Apple has piqued the interest of other major tech firms. The company is in advanced negotiations for both assembly and component supply deals with several clients, although not all discussions are expected to result in contracts due to Tata's preference for high-volume agreements.
Why is Tata looking to diversify?
This strategy of diversification comes after a fire incident at one of Tata's factories, which briefly hindered its scaling efforts.
Prabhu Ram, Vice President at Cybermedia Research, was quoted in the report, stating that Tata's shift from being an Apple-focused supplier to a broader EMS provider highlights its global aspirations. By engaging with top-tier clients, Tata not only diversifies its revenue sources but also positions itself to scale operations and adopt Foxconn's business model, he added, as reported by The Economic Times.
"The plan was always to be an integrated EMS (electronics manufacturing services) player and so this was a natural progression - to service multiple clients. Being able to service Apple has led to a lot of inbound interest from other companies," a source told ET.
The report mentioned that the company has ambitious plans to become a prominent Indian EMS provider capable of competing globally with multiple clients. Experts also suggested that Tata's established supply chain would aid global companies in mitigating risks and diversifying their sourcing options.
Tata Group's Growing Footprint in India's iPhone Manufacturing Sector
Apple's iPhone manufacturers in India include Tata, Pegatron, and Foxconn.
It was reported last month that Tata, the homegrown EMS player, is set to acquire a 60 percent majority stake in Pegatron's iPhone plant in Tamil Nadu.
According to Reuters, Pegatron had been in talks with Tata Group earlier this year to sell its only iPhone manufacturing plant in India, located near Chennai. The goal was to strengthen its position as an Apple supplier in India by forming a joint venture (JV). This factory, which employs around 10,000 people, produces 5 million iPhones annually and contributed about 10 percent to India's iPhone manufacturing last year.
In the previous year, Tata Group took over Wistron's iPhone assembly facility and is planning to set up a new facility in Hosur, Tamil Nadu, in partnership with Pegatron for the JV.
Tata Electronics Emulates Foxconn's Model to Scale Up Operations
Tata Electronics' strategy closely follows that of Foxconn, the Taiwanese electronics manufacturing leader serving multiple global tech firms. By expanding its client base and capabilities, Tata Electronics seeks to emulate Foxconn's success and establish itself as a key player in the global EMS market.
As Tata Electronics gains traction, its partnerships with global tech companies could redefine India's position in the electronics manufacturing industry. With an emphasis on diversification, scalability, and innovation, the company is set to shape the future of India's electronics manufacturing sector.
