Foxconn to Manufacture Apple’s AirPods in Telangana with $200 Million Factory

This deal marks the first time Foxconn will manufacture AirPods.

Foxconn, the world’s largest contract manufacturer, has won an order to make Apple’s AirPod wireless earphones in India. According to a report by Reuters, it plans on building a $200 million factory in the southern Indian state of Telangana.

This deal marks the first time Foxconn will manufacture AirPods. Since the inception of the product in 2016, Foxconn has made 70% of iPhones, but never the AirPods. This shift away from China is part of Apple's efforts to reduce its dependence on Chinese manufacturing.

Initially, Foxconn was unsure about manufacturing the AirPods in India due to the low profit margins, but it has reportedly decided to go ahead with the deal to reinforce its engagement with Apple.

Foxconn often competes with contract manufacturers like Pegatron and Wistron. It plans to start construction of its new AirPods factory in the second half of this year and begin production by the end of 2024. The new facility is likely to be manufacturing the AirPods Pro 2.

Strict COVID-19-related lockdowns have disrupted Apple's production in China, and the increasing US-China cold war further threatens Apple's business, as it is the most exposed to the Chinese manufacturing sector. Apple is trying to diversify its supply chain.