Article Title:
Apple’s Strategic Shift: Exploring iPhone Chip Packaging in India
In a significant move to diversify its supply chain, Apple is reportedly in preliminary discussions with Indian semiconductor manufacturers to assemble and package iPhone components within India. This initiative marks a potential expansion of Apple’s manufacturing footprint beyond final assembly, aiming to include critical processes like chip packaging.
Engaging with CG Semi
Central to these discussions is CG Semi, a subsidiary of the Murugappa Group, which is establishing one of India’s pioneering Outsourced Semiconductor Assembly and Test (OSAT) facilities in Sanand, Gujarat. The facility is poised to handle comprehensive chip assembly, packaging, testing, and post-test services. While the exact components to be packaged remain unspecified, industry insiders suggest that display driver integrated circuits (DDICs) are likely candidates. These DDICs are essential for the functionality of iPhone displays, which Apple currently sources from leading OLED manufacturers such as Samsung Display, LG Display, and BOE. The DDICs for these panels are supplied by companies like Samsung, Novatek, Himax, and LX Semicon, with production and packaging predominantly occurring in South Korea, Taiwan, and China.
Aligning with Apple’s Broader Strategy
This initiative aligns with Apple’s broader strategy to reduce reliance on Chinese manufacturing and mitigate risks associated with geopolitical tensions and trade disputes. By integrating chip packaging processes within India, Apple aims to enhance supply chain resilience and capitalize on favorable trade conditions. Notably, the U.S. administration has imposed significantly lower import duties on Indian goods compared to those from China, making India an attractive manufacturing hub.
Challenges and Opportunities
Engaging with CG Semi presents both challenges and opportunities. Apple is renowned for its stringent quality standards, and CG Semi will need to meet these benchmarks to secure a position in Apple’s supply chain. This endeavor represents a significant step up in the value chain for Indian vendors, potentially elevating India’s status in the global semiconductor industry. Success in this venture could lead to the creation of highly skilled jobs and bolster India’s position as a key player in high-tech manufacturing.
India’s Growing Role in Apple’s Supply Chain
Apple’s interest in expanding chip packaging operations in India is part of a broader trend of increasing its manufacturing presence in the country. Reports indicate that Apple assembled $22 billion worth of iPhones in India during the 12 months ending in March 2025, marking a nearly 60% increase over the previous year. The company aims to manufacture the majority of iPhones sold in the United States in India by the end of 2026. This shift is driven by the desire to diversify manufacturing locations and reduce dependency on China, especially in light of potential tariffs and trade restrictions.
Government Support and Industry Implications
The Indian government’s proactive stance in promoting semiconductor manufacturing further supports this initiative. In May 2025, the government invested $433 million into a joint venture between HCL Group and Foxconn to build a new semiconductor plant in Uttar Pradesh. This plant is expected to be operational by 2027, with plans to produce up to 20,000 wafers per month, translating to 36 million display driver chips. Such investments underscore India’s commitment to becoming a significant player in the global semiconductor supply chain.
Conclusion
Apple’s exploratory discussions with Indian chip manufacturers signify a strategic effort to diversify its supply chain and enhance manufacturing capabilities within India. While these talks are in the early stages, they reflect a broader trend of global tech companies seeking to mitigate risks associated with concentrated manufacturing bases. If successful, this move could strengthen India’s position in the global semiconductor industry and contribute to the country’s economic growth through job creation and technological advancement.
