Apple Explores Chip Assembly Talks with Indian Manufacturers

Apple is reportedly in early discussions with Indian chip manufacturers regarding the assembly and packaging of components for iPhones. Sources familiar with the matter indicate that this move could significantly elevate the role of Indian vendors in Apple's supply chain.

It has been reported that CG Semi, owned by the Murugappa Group, is one of the companies involved in these exploratory talks. CG Semi is currently establishing an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. According to sources, this marks the first time Apple is considering having chips assembled and packaged within India.

One source stated that the discussions are in their preliminary stages. While it remains unclear which specific chips would be packaged at the Sanand facility, the initial focus may be on display chips. The source also cautioned that CG Semi faces a potentially difficult path, as it would need to meet Apple's rigorous quality standards to secure a deal. The source noted that Apple engages with numerous companies for various supply chain functions, with only a select few ultimately making it onto their supplier list.

Apple did not respond to requests for comment. CG Semi stated that they do not comment on market speculation or discussions with specific customers, adding that they will make disclosures when there is concrete information to share.

A successful deal would represent a significant achievement for India's growing semiconductor industry. Recently, Intel and Tata Electronics also signed an agreement to explore manufacturing and packaging Intel products for local markets at Tata Electronics’ upcoming facilities. Their collaboration will also explore advanced packaging in India. Chip packaging is crucial for protecting internal components and enhancing efficiency.

According to analysts, the primary suppliers of iPhone display panels are Samsung Display Corp, LG Display, and BOE. The display driver integrated circuit (DDIC) suppliers for these panel makers include Samsung, Novatek, Himax, and LX Semicon, which primarily rely on manufacturing and packaging units in South Korea, Taiwan, or China.

Prabhu Ram, Vice President of CyberMedia Research, suggests that as India's importance in the global electronics supply chain grows, Apple could benefit from increased resilience and diversification through a partnership with an Indian chip manufacturer. He believes that CG Semi's main challenge will be meeting Apple's stringent quality requirements, achieving consistent yields, and developing extensive OSAT process expertise at scale.

CG Semi's OSAT plant, with an investment of Rs 7,600 crore, is supported by both central and state governments and is being developed in collaboration with Renesas and Stars Microelectronics. This investment, spread over five years, will establish two advanced facilities, G1 and G2. G1, inaugurated on August 28, is designed to handle end-to-end chip assembly, packaging, testing, and post-test services, with a peak capacity of approximately 0.5 million units per day. The company has stated that it remains on track to begin commercial production in calendar year 2026, as committed to the India Semiconductor Mission.