Extensive damage caused by a fire at Tata Group’s Apple iPhone component plant in Tamil Nadu could hamper production ahead of a surge in festive season sales, an industry watcher and a source said, threatening the US firm’s suppliers. Will be forced to source critical parts from China or elsewhere.

A fire over the weekend has halted production indefinitely at Tata’s Hosur plant in Tamil Nadu, which is the only Indian manufacturer of iPhone back panels and some other parts for both contract manufacturer Foxconn in the country and its own iPhone assembly at another plant. Is the supplier.

Hong Kong-based Counterpoint Research told Reuters it estimates local sales of 1.5 million units of iPhone 14 and 15 models during the Indian festival season, which runs from late October to early November, with Apple accounting for up to 15 percent of that demand. Struggling to make ends meet. Due to fire.

Co-founder Neel Shah said, “There will be a 10-15 percent impact on production of older iPhone models from India. Apple can offset that impact by importing more components and redirecting more export inventory to India.” of Counterpoint, which has tracked Apple’s global shipments for years.

Apart from local sales, Tata, one of India’s largest conglomerates, also exported iPhones to the Netherlands and the United States as well as parts of China, totaling more than US$250 million in the year to August 31. , as revealed by commercially available customs data. ,

Tata declined to comment.

Counterpoint said Apple suppliers typically keep three to four weeks’ worth of back panel stock. However, an industry source with direct knowledge of the matter estimates that Apple is likely to have up to eight weeks’ worth of stock, and so it will not see an immediate impact.

However, he said if the production suspension continues, the US company may set up another assembly line in China or add shifts there to secure parts for India’s iPhone makers.

Supply chain disruptions have generally hit Prime Minister Narendra Modi’s campaign to attract foreign investors to “Make in India”, especially in the electronics sector.

Apple is diversifying beyond China, but separate fire incidents in India last year forced suppliers Foxlink and Pegatron to briefly halt operations after officials discovered that most of the fire safety equipment at Foxlink’s facility was not working. Were staying. Contractors Wistron and Foxconn have also been hit by labor unrest in recent years.

“These are temporary setbacks,” said Prabhu Ram, vice president of CyberMedia Research. “Continued efforts to improve safety and operational standards are important to strengthen India’s position as an emerging global electronics manufacturing hub.”

Tata is one of Apple’s newest suppliers in India, with analysts estimating it to contribute 20-25 percent of total global iPhone shipments this year, up from 12-14 percent last year.

The plant affected by the fire employed 20,000 workers. Another unit at the same Tata complex was scheduled to start making full iPhones later this year and it is unclear whether it will be delayed due to the incident.

Tata has another iPhone plant near Bengaluru, which it acquired from Wistron last year, and another in Tamil Nadu, near Chennai, which it is set to acquire from Pegatron.