Foxconn to expand in Tamil Nadu with new iPhone enclosures unit: Report

Foxconn, the Taiwanese contract manufacturer known for assembling iconic iPhones, is embarking on a new venture in India by setting up a unit in Tamil Nadu dedicated to producing iPhone enclosures. This marks Foxconn's first foray into manufacturing enclosures in the country, as previously, Tata Electronics was the sole local producer of such components. "Foxconn plans to start making enclosures in Tamil Nadu as they deepen their footprint in the country," a source told the Economic Times. The new facility will be located near Foxconn's display module assembly plant, currently in advanced stages of development within the same industrial park.

Foxconn is involved in various Apple-related activities, such as assembling iPhones at the Sriperumbudur facility and AirPods in Hyderabad. There are reports of a significant iPhone assembly expansion in progress, with a new facility near Bengaluru. Interestingly, it appears that Foxconn is set to manufacture iPhone casings locally for the first time. This move is expected to boost the overall iPhone production value by an additional 2-3 percent, a modest yet potentially impactful development.

Foxconn's expansion comes amid significant investment in its Indian operations. In May, the company announced a $1.5 billion investment increase for its Tamil Nadu unit through a London Stock Exchange filing. The company has already acquired about 500,000 square feet at the ESR Oragadam Industrial & Logistics Park and is creating a model where components can be utilised by other manufacturers such as Pegatron and Tata Electronics. Construction has begun for the enclosures unit, which will be separate from the display module assembly plant.

Apple's broader strategy to diversify its supply chain is evident in this expansion. Prabhu Ram from CyberMedia Research said: "This aligns well with Apple’s broader strategy to derisk and diversify its supply chain. As India emerges as a lynchpin in Apple’s growth momentum — with early signs of an end-to-end manufacturing ecosystem taking shape — it is a natural progression for Foxconn to expand its capabilities and geographic presence by manufacturing enclosures." Despite recent comments by former U.S. President Donald Trump advocating for Apple to manufacture in the United States, Foxconn is moving forward with its plans in India.

Trump had stated, "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a tariff of at least 25% must be paid by Apple to the US." However, Apple CEO Tim Cook has indicated that for the June quarter, "we do expect the majority of iPhones sold in the US will have India as their country of origin." 

Neil Shah from Counterpoint Research noted, "This gives Apple more leverage and also provides Foxconn with ease of integration and boosts value addition. This improves supply chain effectiveness for Foxconn as well as Apple."

A recent analysis by the Global Trade Research Initiative (GTRI) reveals how the value of a $1,000 iPhone is distributed across countries—and it's far from equal. Apple claims the lion’s share, around $450, thanks to its proprietary software, design, and powerful brand value.

Taiwan contributes approximately $150 through chip manufacturing, while South Korea adds $90 via OLED displays and memory parts. Japan’s high-end camera systems account for $85, and U.S. semiconductor firms like Qualcomm and Broadcom provide components worth another $80. Smaller inputs from Germany, Vietnam, and Malaysia together add up to $45.

Meanwhile, the actual assembly—done in India and China—yields just $30 per unit, less than 3% of the iPhone’s retail price. The report underscores that most of the value is generated by intellectual property and advanced technology, not physical labour.