Fire Incident at Pegatron Factory in Chennai Temporarily Halts iPhone Assembly
Key Highlights :
Apple iPhone maker and contract manufacturer Pegatron has temporarily paused assembly of devices after a fire incident near its factory in Chennai, news agency Reuters reported on Monday. The fire broke out on Sunday night, the news agency added. The Taiwanese contract manufacturer has called off all shifts for the day at the factory near the city of Chennai in the Southern Indian state of Tamil Nadu, and is yet to inform assembly workers whether the facility will function on Tuesday, two sources were quoted as saying by Reuters.
Pegatron was quoted as saying by Reuters in a statement that "there was a spark incident" at the production unit that is "currently under control" and the incident "does not have significant financial or operational impact" for the company. The Pegatron unit has an assembly capacity of about 26,000 iPhones per day, but it has been producing about 8,000-12,000 iPhones per day in the recent months, an industry source was quoted by Reuters. "There are no injuries, casualties, or damage to other assets as a result of the incident. The cause of the accident is currently being investigated by the relevant authorities," Pegatron was quoted as saying.
According to market intelligence firm Counterpoint, Pegatron currently contributes to 10 per cent of iPhone production in India. Apple started local assembly of iPhones in India in 2017 through partners Wistron and subsequently Foxconn. Meanwhile, Apple is said to expand its market share in India's smartphone sales, particularly driven by the super-premium iPhone 15 Pro and iPhone 15 Pro Max models. As per data from Counterpoint, exclusively shared with Reuters, Apple's share of smartphone sales in India from July to December will rise to 7 per cent, an increase from the 5 per cent recorded in the first half of 2023.
Apple has been attempting to break away from dependency on production in China and shift its efforts towards capturing a larger market share amidst declining flagship device sales as well as device assembly in India. The company's suppliers are increasing manufacturing operations in India due to a decline in demand and regulatory challenges in China. The Pegatron factory fire incident has caused a temporary disruption in the production of iPhones in India.
The cause of the incident is yet to be determined and the impact of the fire on the production of iPhones is yet to be seen. However, the incident has highlighted the need for stringent safety measures and regulations in the factories of Apple's suppliers in India. It is also important to ensure that the suppliers are adhering to the safety standards and regulations in order to avoid such incidents in the future.
Apple has been focusing on expanding its presence in India and the incident at the Pegatron factory could hamper the company's plans. The company needs to ensure that its suppliers are adhering to the safety regulations and that the production of iPhones in India is not affected in the long run. The company should also take necessary steps to ensure that such incidents are avoided in the future.
