In a significant development for India’s electronics manufacturing landscape, Tata Electronics is set to acquire a majority stake in Pegatron’s iPhone production plant in Tamil Nadu, marking a strategic expansion of the Tata Group’s presence in the high-stakes smartphone manufacturing sector. The deal, valued between $150-200 million, positions Tata Electronics as a key player in Apple’s Indian manufacturing ecosystem and underscores the state’s growing importance as a global electronics production hub.
The agreement will see Tata Electronics holding a 60% stake in the joint venture, with Pegatron retaining the remaining 40% and providing crucial technical support. This move comes at a critical time when India is rapidly emerging as an alternative manufacturing destination to China for global technology companies, particularly in the smartphone and electronics segments.
Pegatron’s existing facility in Chennai, which currently employs approximately 10,000 workers and produces 5 million iPhones annually, will be the centerpiece of this strategic partnership. The acquisition demonstrates the Tata Group’s commitment to expanding its footprint in the electronics manufacturing sector and capitalizing on the Indian government’s production-linked incentive (PLI) schemes.
Industry experts view this development as a significant milestone for Tamil Nadu’s technology ecosystem. “This acquisition is more than just a financial transaction,” says Rajesh Kumar, a technology industry analyst. “It represents a strategic move that could potentially transform Tamil Nadu into a global electronics manufacturing powerhouse.”
The timing of the deal is particularly noteworthy, coming shortly after industry competitor Foxconn began manufacturing the iPhone 16 Pro Series at its Tamil Nadu unit. Tata Electronics, which already operates in joint capacities with both Wistron and Pegatron facilities, is positioning itself to compete directly with Foxconn, currently the leading iPhone manufacturer in India.
“The Tata Group’s investment signals strong confidence in Tamil Nadu’s manufacturing infrastructure and skilled workforce,” comments Priya Natarajan, a technology startup ecosystem consultant. “It’s not just about producing smartphones, but about building a comprehensive electronics manufacturing ecosystem that can attract global technology companies.”
The financial implications are substantial. The reported investment of $150-200 million represents a significant commitment to scaling up electronics manufacturing capabilities. This move aligns with the Indian government’s broader goals of reducing import dependence and establishing India as a global manufacturing hub.
For the Tamil Nadu startup ecosystem, this development could be transformative. The investment is expected to:
- Create additional employment opportunities
- Attract ancillary technology and electronics manufacturing startups
- Enhance the state’s reputation as a technology and manufacturing destination
- Potentially trigger more foreign direct investment in the electronics sector
Earlier this year, Tata Electronics was already in advanced discussions to hold at least a 65% stake in a joint venture with Pegatron, specifically to operate a manufacturing plant in Hosur, Tamil Nadu. The current deal appears to be a culmination of those strategic discussions.
As India continues to position itself as an alternative to traditional manufacturing powerhouses, deals like this underscore the country’s potential. The Tata Electronics-Pegatron partnership represents more than a mere business transaction—it’s a statement of India’s technological ambition and manufacturing capabilities.
