In a significant move that could reshape its supply chain, Apple Inc. has initiated preliminary discussions with Indian chip manufacturers for the assembly and packaging of components destined for its iconic iPhones. This marks the tech giant's first serious evaluation of having specific chips assembled within India, potentially marking a major leap for the country's burgeoning semiconductor sector.
CG Semi's Sanand Facility at the Heart of Talks
According to a report, initial conversations have taken place between Apple representatives and CG Semi, a company owned by the storied Murugappa Group. CG Semi is currently establishing a major outsourced semiconductor assembly and test (OSAT) plant in Sanand, Gujarat. This facility, valued at a substantial Rs 7,600 crore, enjoys support from both central and state governments and is being built in partnership with global players Renesas and Stars Microelectronics.
The investment is spread over five years and aims to develop two advanced units: G1 and G2. The G1 facility was inaugurated on August 28 and is designed to operate at a peak capacity of roughly 0.5 million units per day. It boasts comprehensive capabilities for full chip assembly, packaging, testing, and post-test operations. CG Semi has confirmed its plan to commence commercial operations in the calendar year 2026, aligning with its commitments under the India Semiconductor Mission.
Display Chips Likely, But Challenges Remain
While discussions are in the very early stages, sources suggest that the Sanand facility would likely handle display chips for Apple, though the final decision is not yet clear. This potential partnership represents both a massive opportunity and a formidable challenge for CG Semi. Advancing talks would necessitate meeting Apple's famously strict quality requirements and achieving consistent production yields at scale.
An industry source highlighted the high bar, noting, "Apple is already in talks with several companies for various supply chain functions, and very few will ultimately make it to their approved supplier list." Successfully onboarding Apple would serve as a powerful endorsement of India's technical capabilities in advanced electronics manufacturing.
A Boost for India's Semiconductor Ambitions
A potential agreement with Apple would signify a notable advancement for India's semiconductor ecosystem, coming close on the heels of Intel's recent collaboration with Tata Electronics. That December 8 pact outlined plans to explore manufacturing and packaging of Intel products for domestic markets at Tata's upcoming facilities.
Industry experts see strategic value in this development. Prabhu Ram, Vice President at CyberMedia Research, stated, "As India evolves into a crucial component of the global electronics supply chain, Apple could gain from increased stability and supply chain diversification by partnering with an Indian chip manufacturer." He identified the core task for CG Semi as mastering deep OSAT process expertise to satisfy Apple's rigorous standards.
Currently, Apple sources iPhone display panels from leading OLED makers like Samsung Display, LG Display, and BOE. The display driver chips (DDIC) for these panels come from providers such as Samsung, Novatek, Himax, and LX Semicon, which primarily rely on production and packaging facilities located in South Korea, Taiwan, or China. Establishing a new, reliable node in India would gradually alter this geography.
This exploration by Apple underscores the growing importance of India not just as a massive sales market, but as a pivotal and trusted manufacturing hub in the global technology supply chain.
