Pegatron India's iPhone factory shutdown to go into third day after fire - sources

People are seen outside the main gate of the Pegatron facility following a fire incident at the facility near Chennai, India, September 26, 2023. REUTERS/Praveen Paramasivam

CHENGALPATTU, India (Reuters) -A production shutdown at Apple supplier Pegatron's India iPhone factory is expected to extend into Wednesday and disruptions could last longer as authorities investigate a fire at the Taiwanese firm's only India plant, four sources said.

Pegatron described the Sunday fire as a "spark incident" which caused no injuries and said has "no financial or operational impact to Pegatron Corporation", but called off all assembly shifts for Monday and Tuesday, Reuters previously reported.

Four sources briefed on the matter said Wednesday shifts were also unlikely. One of them said damage was being repaired at the plant in Chengalpattu area near the southern city of Chennai in Tamil Nadu state, and in the worst case the shutdown could last the entire week.

One of the sources said Apple representatives were collaborating with Pegatron after the incident.

Apple and Pegatron did not respond to requests for comment.

Pegatron has asked independent surveyors to assess the fire damage, a fifth source said. All the sources declined to be identified as they are not authorised to speak to media.

On Tuesday, the gates of the factory remained shut with only a few workers allowed inside. Many company buses which typically ferry employees from their accommodation to the plant were parked outside the facility. A board displayed outside the factory stated it assembles about 5 million phones a year.

The disruptions are the latest to impact Apple suppliers in India, a country where the U.S. tech giant is fast expanding manufacturing of iPhone and other devices for domestic and export markets. The affected Pegatron India plant accounts for 10% of Apple's iPhone production in the country.

This is not the first time facilities producing Apple-related products have been disrupted in India.

A state industrial safety official said the Pegatron fire started from a charging rack - where phones are tested after assembly - located at the first floor of the building, at around 8 p.m. on Sunday when around 29 workers were present.

They left the facility as soon as they saw black smoke and six machines were damaged during the fire, the official added, without explaining what type of machines were affected.

The facility is spread across 39,000 square metres and has roughly 8,000 workers on the assembly line. It does not make iPhone 15 but assembles older variants of the smartphone.

Apple has bet big on India since it began iPhone assembly in the country in 2017 via Wistron and later Foxconn, as the Indian government pushed for local manufacturing.

Pegatron, which started iPhone assembly in India in September last year, is also in talks to open a second Indian contract facility for Apple near the existing one in Tamil Nadu.

(Reporting by Praveen Paramasivam, Aditya Kalra and Munsif Vengattil; Editing by Kim Coghill and Jacqueline Wong)

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