The ‘Make in India’ initiative has received a major shot in the arm with Apple Inc. initiating exploratory talks to shift the assembly and packaging of certain iPhone chips to Indian facilities. The move, if finalised, would mark Apple’s first serious foray into semiconductor backend operations in India and elevate the country’s role from a device-assembly hub to a higher-value node in the global electronics supply chain.
According to reports, Apple is in discussions with Indian semiconductor firms, with a particular focus on outsourced semiconductor assembly and test (OSAT) processes. These backend operations involve assembling silicon dies into finished chips and packaging them for integration into devices. While full-scale chip fabrication remains outside the scope of the current talks, the proposed shift itself is a strategic leap aligned with India’s long-term semiconductor ambitions.
At the centre of these discussions is CG Semi, a unit of the Murugappa Group, which is developing a large OSAT facility in Sanand, Gujarat. Reports indicate that CG Semi has emerged as Apple’s primary Indian partner in these exploratory engagements, underscoring the growing credibility of Indian industrial groups in advanced electronics manufacturing.
Why this matters for Make in India
For nearly a decade, ‘Make in India’ has aimed to move the country beyond low-value manufacturing into complex, technology-intensive production. Apple’s reported plans reflect precisely this transition. While India has already become a key base for assembling complete iPhones, shifting chip assembly and packaging represents a step higher in the manufacturing hierarchy.
The initial focus is expected to be on display driver integrated circuits (DDICs), critical components used in OLED panels of iPhones. Currently, these chips are fabricated and packaged in facilities located in South Korea, Taiwan, and China. By localising the backend stages in India, Apple would shorten supply chains, reduce logistical risks, and cut transportation costs and import duties.
Apple sources its OLED display panels from global leaders such as Samsung Display, LG Display, and BOE, while DDICs are supplied by firms including Samsung, Novatek, Himax, and LX Semicon. Integrating Indian OSAT facilities into this ecosystem would embed India deeper into Apple’s core hardware architecture.
Apple’s interest in expanding semiconductor-related operations in India builds on its rapid manufacturing scale-up over the past few years. By March 2025, iPhone assembly in India had reached a value of $22 billion, reflecting a sharp 60 per cent year-on-year increase. Today, Tata Electronics, Foxconn, and Pegatron collectively handle full-device assembly for Apple in the country.
This expansion is not incidental. As Apple accelerates its diversification away from China, India has emerged as a strategic anchor. Factors driving this shift include US–China trade tensions, geopolitical uncertainties, and the persistent threat of tariff escalation, particularly under former US President Donald Trump, who has repeatedly warned against offshoring manufacturing to India.
Despite these threats, Apple has stayed the course. In fact, the company aims to produce the majority of iPhones sold in the United States at Indian factories by the end of 2026. The proposed move into chip assembly and packaging reinforces the view that India is no longer just a fallback option, but a central pillar of Apple’s long-term manufacturing strategy.
Backend semiconductors
While advanced processors such as Apple’s A-series and M-series chips continue to be fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), backend localisation offers meaningful advantages. OSAT operations, though less capital-intensive than front-end fabs, are crucial for scaling semiconductor production and ensuring supply chain resilience.
By shifting these processes to India, Apple stands to benefit from the country’s growing pool of skilled engineers, improving precision manufacturing capabilities, and competitive cost structures. For India, the gains are even more substantial.
If the Apple-CG Semi talks materialise, the Sanand facility alone is expected to generate a significant number of high-skilled jobs in chip testing, assembly, and packaging. Beyond direct employment, the ripple effects could be transformative. Ancillary industries supplying materials, equipment, logistics, and services would also see growth, potentially creating thousands of additional jobs.
Local packaging would reduce dependence on East Asian hubs and could attract global suppliers of semiconductor materials and tools to set up operations in India. Over time, this could foster an ecosystem similar to those in Taiwan or Vietnam, making India a natural destination for further electronics investments.
Apple’s involvement would also serve as a strong confidence signal. Historically, when Apple commits to a geography, other global technology firms tend to follow, either as suppliers or as independent investors.
Alignment with India’s Semiconductor mission
Apple’s plans dovetail neatly with the Modi government’s India Semiconductor Mission, which aims to build a comprehensive semiconductor ecosystem spanning design, fabrication, assembly, and packaging. The government offers financial support of 30 per cent of capital expenditure for eligible applicants setting up semiconductor ATMP/OSAT facilities, as well as compound semiconductor, silicon photonics, and sensor fabs.
In addition, incentives are provided for semiconductor design, including infrastructure support across multiple stages. Under the Product Design Linked Incentive scheme, companies can receive up to 50 per cent of eligible expenditure, subject to a cap of ₹15 crore per application. Deployment Linked Incentives of 6 to 4 per cent of net sales turnover over five years are also available, capped at ₹30 crore per application.
Such policy backing significantly lowers entry barriers and enhances India’s attractiveness for global players like Apple.
Apple’s reported move comes amid growing momentum in India’s semiconductor sector. Recently, Intel partnered with Tata Electronics for collaboration focused on consumer and enterprise hardware enablement, as well as semiconductor and systems manufacturing. Tata Electronics’ upcoming fab and OSAT facility in Assam will manufacture and package Intel products for local markets, including advanced packaging solutions.
These developments indicate that India’s semiconductor push is no longer aspirational but operational, with tangible partnerships taking shape.
Strategic and Geopolitical implications
For Apple, diversifying chip packaging to India reduces exposure to risks emanating from the Taiwan Strait and other geopolitical flashpoints in East Asia. For India, it reinforces the country’s positioning as a reliable and efficient alternative to China.
The Modi government’s Production Linked Incentive (PLI) schemes have already attracted substantial foreign investment in electronics manufacturing. Apple’s deeper integration into India’s semiconductor ecosystem would further validate these policies and accelerate progress toward self-reliance.
It is also worth recalling that in September this year, despite repeated threats from Donald Trump to halt manufacturing in India, Apple announced plans not only to expand iPhone assembly but also to localise the production of specialised machinery used in iPhone manufacturing. Reports suggested that Apple is moving beyond component sourcing to manufacturing capital equipment and tools within India itself.
While challenges remain, ranging from infrastructure readiness to technology transfer, the direction is unmistakable. Apple’s interest in chip assembly and packaging signals that India is steadily climbing the electronics value chain.
For ‘Make in India’, this is not merely another investment headline. It represents a structural shift, where global technology leaders begin to trust India with critical, high-value processes. If sustained, such partnerships could eventually open the door to even more sophisticated components and, in the longer term, front-end semiconductor fabs.
