The ‘Make in India’ initiative has gained significant momentum as Apple Inc. embarks on exploratory discussions to relocate the assembly and packaging of select iPhone chips to facilities within India. 

Should these talks culminate in agreements, it would signify Apple’s inaugural substantial venture into semiconductor backend processes on Indian soil, transforming the nation’s position from a mere assembly outpost to a pivotal hub in the worldwide electronics supply chain.

Reports highlight that Apple is engaging with domestic semiconductor enterprises, emphasising outsourced semiconductor assembly and test (OSAT) activities. These operations encompass the integration of silicon dies into complete chips and their subsequent packaging for device incorporation. 

Although comprehensive chip fabrication lies beyond the present negotiations, this prospective relocation aligns seamlessly with India’s overarching semiconductor aspirations.

Central to these deliberations is CG Semi, a division of the Murugappa Group, which is constructing a substantial OSAT plant in Sanand, Gujarat. Indications suggest that CG Semi has positioned itself as Apple’s foremost local collaborator in these preliminary exchanges, affirming the rising stature of Indian conglomerates in sophisticated electronics production.

This development holds profound implications for the ‘Make in India’ programme, which has pursued for almost a decade the elevation of the country from rudimentary manufacturing to intricate, technology-driven output. Apple’s prospective strategy epitomises this evolution. India has already solidified its status as a prime venue for iPhone device assembly, yet transitioning chip packaging upwards marks a notable ascent in the production pyramid.

The preliminary emphasis is anticipated on display driver integrated circuits (DDICs), vital elements in iPhone OLED displays. At present, these chips undergo fabrication and packaging in plants across South Korea, Taiwan, and China. Localising these backend phases in India would streamline supply chains for Apple, mitigate logistical vulnerabilities, and diminish transport expenses alongside import tariffs.

Apple procures its OLED panels from industry frontrunners like Samsung Display, LG Display, and BOE, with DDICs sourced from entities such as Samsung, Novatek, Himax, and LX Semicon. Incorporating Indian OSAT sites into this network would weave India more intricately into Apple’s foundational hardware framework.

This semiconductor expansion draws upon Apple’s swift manufacturing escalation in India in recent years. By March 2025, iPhone assembly value in the country had surged to $22 billion, registering a robust 60 per cent year-on-year growth. Tata Electronics, alongside Foxconn and Pegatron, now manages comprehensive device assembly for Apple domestically.

Such progress is far from serendipitous. As Apple hastens its diversification from China, India has ascended as a cornerstone alternative. Key catalysts include US-China trade frictions, geopolitical instabilities, and looming tariff hikes, especially amid warnings from former US President Donald Trump regarding offshoring to India.

Nevertheless, Apple persists undeterred. The firm targets producing most US-bound iPhones from Indian plants by the close of 2026. Extending into chip assembly and packaging buttresses the perception that India transcends a mere contingency, emerging as a bedrock of Apple’s enduring manufacturing blueprint.

Backend semiconductor processes, while demanding less capital than front-end fabrication facilities, remain indispensable for expanding production and fortifying supply chain durability. Advanced processors like Apple’s A-series and M-series persist under Taiwan Semiconductor Manufacturing Company (TSMC) fabrication, yet backend localisation yields tangible benefits.

Relocating these to India equips Apple with access to an expanding reservoir of adept engineers, advancing precision manufacturing prowess, and cost-effective frameworks. For India, the advantages prove even more profound.

Should the Apple-CG Semi partnership fructify, the Sanand site alone promises a surge in high-skill employment across chip testing, assembly, and packaging. Beyond immediate jobs, cascading effects could prove revolutionary, spurring ancillary sectors in materials, equipment, logistics, and support services, potentially yielding thousands more positions.

Domestic packaging would curtail reliance on East Asian centres and might lure international semiconductor material and tool providers to establish Indian footprints. In the long run, this could cultivate an ecosystem akin to those in Taiwan or Vietnam, positioning India as a magnet for escalating electronics ventures.

Apple’s endorsement would dispatch a potent signal of assurance. Conventionally, Apple’s commitment to a region prompts other technology giants to trail, whether as suppliers or standalone investors.

These plans harmonise adeptly with the Modi government’s India Semiconductor Mission, geared towards erecting a holistic semiconductor landscape encompassing design, fabrication, assembly, and packaging. The administration extends 30 per cent fiscal aid on capital outlay for qualifying semiconductor ATMP/OSAT setups, alongside compound semiconductors, silicon photonics, and sensor fabs.

Further, incentives cover semiconductor design phases with infrastructural aid. The Product Design Linked Incentive scheme reimburses up to 50 per cent of eligible costs, capped at ₹15 crore per submission. Deployment Linked Incentives offer 6 to 4 per cent of net sales over five years, limited to ₹30 crore per application.

This policy scaffolding substantially eases market entry and amplifies India’s allure for conglomerates like Apple.

Apple’s initiative unfolds against accelerating traction in India’s semiconductor domain. Lately, Intel allied with Tata Electronics for consumer and enterprise hardware facilitation, plus semiconductor and systems production. Tata’s impending fab and OSAT in Assam will fabricate and package Intel wares for domestic markets, incorporating cutting-edge packaging.

These strides affirm that India’s semiconductor endeavour has transitioned from vision to execution, with concrete alliances materialising.

Strategically, for Apple, dispersing chip packaging to India lessens perils from Taiwan Strait tensions and East Asian flashpoints. For India, it cements the nation’s stature as a dependable, proficient substitute to China.

The government’s Production Linked Incentive (PLI) frameworks have already drawn hefty foreign capital into electronics. Apple’s profounder embedding in India’s semiconductor fabric would validate these measures and hasten self-reliance.

Notably, in September this year, despite Donald Trump’s recurrent threats to curb Indian manufacturing, Apple unveiled expansions not just in iPhone assembly but also in localising specialised iPhone production machinery. Indications point to Apple advancing from component procurement to in-country capital equipment and tool fabrication.

Challenges persist, from infrastructural preparedness to technology handover, yet the trajectory is evident. Apple’s pursuit of chip assembly and packaging heralds India’s methodical climb up the electronics value ladder.

For ‘Make in India’, this transcends a routine investment bulletin. It embodies a paradigm shift, wherein global tech titans entrust India with vital, high-value operations. Sustained, such alliances could unlock pathways to more advanced components and, ultimately, front-end fabs.

Based On Organiser Report