Jabil to set up Rs 2K cr electronics unit in TN

In a sign of the expanding Apple supplier ecosystem in India, American multinational Jabil Inc will set up an electronics manufacturing facility in Tiruchirappalli, Tamil Nadu with an investment of Rs 2,000 crore.

Jabil is one of the 14 Apple suppliers in India, of around 200 globally, while another 14 have reportedly received preliminary clearance to form joint ventures with Indian companies to set up facilities.

Interestingly, of the 14 existing manufacturing units in the Apple supply chain, seven are already in Tamil Nadu.

This comes as the American technology giant ramps up production in India through its largest vendors — Foxconn, Pegatron, Tata Electronics, and Wistron — to increase capacity.

The current suppliers in Tamil Nadu include Tata Electronics, Flex, Hon Hai Precision (Foxconn), Guangdong Lingyi iTECH Manufacturing, ON Semiconductor Corporation, Pegatron Corporation, Taiwan Surface Mounting Technology, and Zhen Ding Technology Holding.

Jabil is also a major supplier to Cisco and HP.

Earlier this year, Jabil began producing AirPod components — plastic bodies — for Apple in India.

Its major export destinations from India are Vietnam and China.

Jabil’s 858,000-square-foot Pune facility employs around 2,500 people.

The Tiruchirappalli deal was finalised on Tuesday as part of Chief Minister M K Stalin’s visit to the US.

“A significant investment of Rs 2,000 crore by Jabil at Tiruchirappalli, a global leader in electronic manufacturing services.

"This will create 5,000 jobs and create a new cluster for electronics manufacturing,” Stalin posted on X.

Tamil Nadu Industries Minister T R B Rajaa noted that Jabil’s investment would create employment opportunities in the surrounding areas of Trichy, Pudukkottai, Madurai, Dindigul, Karur, and Thanjavur.

In addition, Rockwell Automation is expanding its manufacturing with a Rs 666 crore investment in Kanchipuram, adding 365 jobs. A memorandum of understanding was also signed with Autodesk to skill youth and support micro, small and medium enterprises, and startups, further strengthening the state’s industrial ecosystem.

A memorandum of understanding was also signed with Autodesk to skill youth and support micro, small and medium enterprises and startups, further strengthening the state’s industrial ecosystem.

Tamil Nadu has seen a spike in electronics exports recently, driven primarily by the spike in iPhone exports.

The state is now India’s top electronics exporter, with exports reaching $9.56 billion in 2023-24 (FY24), up 78 per cent from $5.37 billion in 2022-23, far ahead of Karnataka and Uttar Pradesh.

According to industry experts, one major reason for the rise in exports is the China Plus One strategy adopted by global players like Apple, which has led contractors such as Foxconn and Pegatron, along with suppliers like Salcomp, to contribute to Tamil Nadu’s emergence as an electronics hub.

Coined in 2013, the China Plus One strategy involves companies diversifying their investments to destinations outside China.

Tamil Nadu Industries Minister T R B Rajaa noted that Jabil’s investment would create employment opportunities in the surrounding areas of Trichy, Pudukkottai, Madurai, Dindigul, Karur, and Thanjavur.

“This will significantly boost the economy of the central zone, creating a new hub for electronics manufacturing in Tamil Nadu.

"With this, Tamil Nadu will have its third major electronics cluster after Sriperumbudur and Hosur,” Rajaa said.

Apple exported phones worth Rs 34,089 crore in the first four months of this financial year.

While Apple is shifting a large part of its supply chain to India under the Make In India for the World initiative, it is also expanding its domestic market.

In FY24, the company’s domestic market is expected to reach Rs 67,000 crore.

Reports suggest that 14 companies, including Luxshare, Sunny Optical, Han’s Laser Technology, YUTO Packaging Technology, Strong, Salcomp, and Boson, have approached the government for initial clearance.