Advantage India, as Apple's main iPhone assembler, seeks to diversify most of its production away from COVID-19-hit China: analyst

China is a critical cog in the AAPL wheels of Apple, Inc., from both a demand and supply perspective. With the country under harsh COVID-19 related lockdowns, it has become an unreliable place to concentrate production.

What happened: Hon Hai Precision Manufacturing Company Limited HNHPF, popularly known as Foxconn, will accelerate the expansion of iPhone production capacity in India - a decision motivated by Zhengzhou's COVID-19 lockdown of the iPhone Factory business, said TFI Securities analyst Ming-Chi Kuo, citing his survey results.

Analyst expects Foxconn's iPhone production in India to grow at least 150% year-on-year in 2023. About 40 to 45 % of iPhones assembled by Foxconn will likely come from India in the medium to long term, up from 2-4% currently, he added.

"Foxconn's iPhone production capacity in India will increase rapidly over the next few years," the Taiwan-based analyst said.

See also: Apple entices Chinese iPhone customers with steep discounts, but sales stutter amid domestic weakness: report< /em>

Why is it important? While risks in China abound, Apple has consciously tried to diversify its production base. The company is enlisting the support of Pegatron as India's second-largest iPhone maker, according to a Bloomberg report. Around 25% of Apple's iPhone production will move to India by 2025, the report adds.

Data provided by Loup Funds, the venture capital firm co-founded by Gene Munster, shows that Apple's production exposure in China has increased from 60-62% in 2020 to 52-55% in 2021.< /p>

Apple closed Friday's session down 0.19% at $138.38, according to data from Benzinga Pro.

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