Apple: Titan and Murugappa may make iPhone camera parts to keep China out

Apple is in talks with Murugappa Group and Tata Group’s Titan Company to assemble and possibly manufacture subcomponents of iPhone camera modules, people familiar with the matter told ET.

If the deal goes through, the Cupertino-based company would move its operations further out of China, further deepening India’s supplier ecosystem.

Apple currently has no Indian supplier for the camera modules built into its iconic phones, some of which are currently assembled in India. “Partnering with Titan or Murugappa Group could potentially address this issue,” said one of the people quoted above.
“In five to six months, they (Apple) will make a final decision on which (partner) to bet on,” the person said.

Assemble the camera first

Another person said the camera module is a critical component that is currently one of the “biggest challenges for Apple in India.”

Titan specializes in manufacturing precision parts for watches and jewelry.
Headquartered in Chennai, Murugappa Group is a century-old industrial company with vast interests spanning engineering, financial services and chemicals.
ET reported on April 11 that Apple is looking to move at least half of its supply chain to India and increase local value addition from suppliers by almost 50% over the next three years. Emails sent to Apple, Murugappa Group, and Titan did not elicit any responses by press time Monday.

Industry experts say Apple is likely to start by assembling camera modules in India.

“Starting with module assembly is a good foundation for attracting various subassembly manufacturers and building a complete local value chain from image sensor to lens to the entire camera module,” said a person familiar with the matter. A major US manufacturer added: is increasingly leveraging local sources for products that are difficult to source from existing suppliers.

The talks with Titan and Murugappa are examples of the company looking to strengthen its foothold in India. Both groups have deep expertise in precision manufacturing.

In 2022, Murugappa Group acquired 76% stake in Moshine Electronics, a Noida-based camera module maker, to diversify its business in the electronics and components sector.

Headquartered in Bangalore, Titan Company owns Titan Engineering and Automation, which started as an in-house engineering division manufacturing and designing high-precision components. The company has expanded significantly and now serves customers around the world across industries such as defense and aerospace.

“In particular, Murugappa Group, which has acquired Moshine Electronics, has an advantage. In the future, with a potential factory, it could be able to manufacture image sensors.” “We believe it has the potential to become an end-to-end player or partner in the industry,” said the person cited above.

Similarly, the Tata Group (of which Titan is also a group company) could go from assembling camera modules and sub-components to eventually manufacturing within the factory, he added.

Separately, Tata and Murugappa Group applied for and qualified for government incentives to set up semiconductor chip assembly units in India. Tata Group is also building an $11 billion chip factory in Dholera, Gujarat.

Diversification of supply
Image sensor chips within camera modules typically form the largest and most expensive component of smartphones and displays.

Oppenheimer’s Martin Yang previously told ET that Apple will either rely on imports for these components or set up a local manufacturing unit in India. “For image sensors, Apple relies heavily on Sony from Japan, Samsung from South Korea, and OmniVision from China. These image sensors are specialized semiconductors that make it very difficult for new entrants to enter this market. It’s expensive,” Yang said.

Sourcing locally not only reduces dependence on Chinese suppliers, but could also provide significant cost benefits for Apple.

With the Production-Linked Incentive (PLI) scheme in place, Apple is very aggressively promoting manufacturing in India. Some of its largest electronics manufacturing services partners, Foxconn, Pegatron and Wistron (now taken over by Tata Electronics) have a significant presence in India.

ET reported in December last year that Apple was in talks with component manufacturers such as India’s Aequs Group and Taiwanese camera and lens maker Rayprus Technologies, as well as preliminary talks with Indian contract manufacturing company Dixon Technologies. .

Experts say Rayprus is one of the world’s leading manufacturers of multi-camera modules for smartphones and one of the few technology suppliers not based in China.

ET’s January report said Apple is targeting to produce close to Rs 1,000 crore worth of iPhones in India by the end of March or the first quarter of fiscal 2025 by ramping up the production capacity of its manufacturing partners. Approximately 70% of iPhones produced in India are exported, and the export value will only continue to increase.