Employee buses enter the Pegatron facility near Chennai

Employee buses enter the Pegatron facility near Chennai, India, March 7, 2023. REUTERS/Praveen Paramasivam/File Photo Acquire Licensing Rights

CHENNAI, Sept 25 (Reuters) - Apple (AAPL.O) supplier Pegatron has told its factory workers not to report for work on Tuesday, halting the assembly of iPhones for a second straight day at its south India factory where a fire broke out on Sunday, three sources told Reuters.

The workers were not given a reason for the directive, said the sources who have direct knowledge of the matter.

The Taiwanese firm had called off all shifts on Monday at the factory near the city of Chennai in Tamil Nadu state after the fire incident, two source said.

Pegatron (4938.TW) previously told Reuters in a statement on Monday "there was a spark incident" at the facility and is currently under control. The incident "does not have significant financial or operational impact" for the company, it added.

While the facility has a production capacity of about 26,000 iPhones per day, it has been assembling about 8,000-12,000 iPhones per day in recent months, an industry source said.

Pegatron declined to comment on the production estimate.

Apple did not respond to a request for comment.

A local official with the emergency responses department said multiple fire engines from various stations had to be brought in to douse the fire, taking nearly five hours.

"There are no injuries, no casualties, nor damage to other assets. The cause of (the) accident is currently under investigations by (the) relevant authority," Pegatron said.

A police official told Reuters an inquiry was underway along with the fire department, describing it as a minor incident.

Local media reported late Monday the fire led to black smoke covering the nearby area, with footage showing security guards trying to clear a crowd that had gathered near the entrance of the facility.

Pegatron accounts for 10% of Apple's iPhone production in India, according to research firm Counterpoint. It estimates Apple will sell more than nine million iPhones in India this year.

Apple has bet big on India since it began iPhone assembly in the country in 2017 via Wistron (3231.TW) and later Foxconn (2317.TW), 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.

The incident is the latest problem to hit one of Apple's 14 suppliers in India.

Production was hit at a Foxconn facility in 2021 by food poisoning among workers, while a Wistron plant in India was affected by worker unrest in 2020 over non-payment of wages. In February, a fire at a south Indian facility of Foxlink for iPhone charging cables forced it to halt production.

Reporting by Ben Blanchard, Praveen Paramasivam, Munsif Vengattil, Aditi Shah and Sarah Wu; Editing by Toby Chopra, Susan Fenton, Mark Potter and Aurora Ellis

Munsif Vengattil is a Reuters' India technology correspondent, based in New Delhi. He tracks how policymaking is influencing the business of tech in India, and how the country is now vying more aggressively to be a powerhouse in the global electronics supply chain. He also regularly reports on big tech giants, including Facebook and Google, and their strategies and challenges in the key Indian market.


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