Apple in trouble due to fire at iPhone component factory in India

Tata's iPhone component factory has stopped production after a fire, forcing Apple to import goods from China to India.

A fire broke out at a Tata Electronics factory in southern India that makes components like back panels and other parts for iPhones over the weekend, leaving 10 people with minor injuries. On October 1, the company announced that production would be suspended indefinitely to investigate the cause and limit further damage.

Shilpa Prabhakar Satish, a senior Indian health official, told Reuters the factory was "very badly burnt and there is absolutely no visibility inside".

This is the latest incident to affect the iPhone supply chain in India, as Apple seeks to diversify production and sees the country as a key growth market.

Apple has not commented on the incident.

The Apple logo at an Apple Store in Wuhan, China, April 2024. Photo: Liu Gui

Tata Electronics, a subsidiary of the Tata Group, is one of Apple's main suppliers in India, alongside Taiwan's Foxconn. According to Reuters , the serious incident could disrupt production just ahead of the year's biggest shopping season.

Counterpoint Research estimates that iPhone 14 and iPhone 15 sales in India during the festive season from late October to early November could reach 1.5 million units, and Apple is expected to have a 10-15% shortage of iPhones due to the fire. Neil Shah, co-founder of Counterpoint, said Apple may have to compensate by importing components from China.

Apple suppliers typically stockpile components for three to four weeks, so the market impact won’t be immediate. However, if the production stoppage is prolonged, Apple may have to set up another assembly line in China to ensure enough iPhone production.

“This is just a temporary setback. Continuous efforts to improve safety and operational standards are important to strengthen India’s position as an emerging global electronics manufacturing hub,” said Prabhu Ram, vice president, Cybermedia Research.