apple eyes india for us iphone production amid trade tensions

2025-04-25 tsmc

taipei, Friday, 25 April 2025.
apple is planning a significant shift in its iphone production strategy. the company intends to manufacture all iphones sold in the us in india by 2026. this move aims to sidestep escalating us-china trade war tariffs. it also reduces apple’s reliance on china. this transition could impact tsmc, a key apple supplier, potentially affecting its revenue streams and market dominance. in march, apple already airlifted $2 billion worth of iphones from india to the us to avoid levies.

tsmc’s position in a shifting landscape

As Apple aims to produce all iPhones for the U.S. market in India by 2026, this strategic decision has implications for Taiwan Semiconductor Manufacturing Co. (TSMC), a primary chip supplier for Apple [1]. The move necessitates TSMC to re-evaluate its manufacturing strategies to align with Apple’s geographic production shift [GPT]. This adjustment is crucial for TSMC to maintain its revenue streams and market position, considering the potential impact on its existing manufacturing capacity and resource allocation [1]. The company may need to invest in new facilities or expand current operations in India to support Apple’s increased production volume [alert! ‘speculative’].

geopolitical risks and supply chain diversification

Apple’s decision is largely driven by geopolitical tensions between the U.S. and China, exacerbated by tariffs imposed by the Trump administration [1][3]. These tariffs, reaching up to 145%, have created turmoil in the electronics manufacturing sector [2]. While smartphones and computers currently have exemptions, the potential for increased tariffs on chip-heavy products looms [1][2]. By diversifying its supply chain and shifting production to India, Apple aims to mitigate these risks and avoid potential disruptions [3]. This strategy reflects a broader trend among multinational corporations to reduce reliance on any single country for critical manufacturing processes [GPT].

india’s growing iphone production

India is rapidly becoming a key hub for iPhone production. In the fiscal year ending March 2025, Apple manufactured approximately $22 billion worth of iPhones in India, marking a 60% increase year-over-year [7]. Currently, about 20% of the world’s iPhones are assembled in India, and this percentage is expected to grow significantly [1][7]. To meet the new production goals, Apple is in urgent talks with Foxconn and Tata Electronics to boost manufacturing capabilities in India [7]. These companies are expanding their operations to accommodate the increased demand and ensure a smooth transition [1].

challenges and obstacles

Despite the strategic advantages, Apple’s shift to India faces obstacles. Chinese authorities are reportedly hindering the relocation of iPhone manufacturing equipment [8]. One Apple supplier had to establish a front company in Southeast Asia to purchase equipment and then ship it to a Foxconn factory in India [8]. These challenges highlight China’s intent to maintain its dominance in the global supply chain [8]. Overcoming these hurdles will be crucial for Apple to achieve its production targets in India and further reduce its dependence on China [alert! ‘assumes challenges will be overcome’].

market expert views and future outlook

Daniel Newman, CEO of Futurum Group, believes that Apple’s move to India is vital for maintaining growth and momentum amidst tariff risks [7]. He notes the company’s swift action in addressing these challenges [7]. Apple shipped 57.9 million iPhones in Q1 2025, a 10% increase from the previous year, indicating strong demand [7]. The company’s upcoming earnings report will provide further insights into the financial implications of this strategic shift [7]. The success of this transition will depend on effective supply chain management, favorable trade policies, and the ability to overcome logistical and political obstacles [alert! ‘multiple assumptions’].

Bronnen

supply chain iphone production