India has proposed extending tax exemptions until 2041 for foreign companies that provide machinery to contract manufacturers, handing a major win to Apple which had lobbied for such changes, and is fast expanding in the market.
India has been a key market for Apple as it diversifies iPhone manufacturing beyond China, and the South Asian nation is set to make 26% of the world’s iPhones in 2026, up from 6% four years ago, according to Counterpoint Research.
According to a draft of the proposed tax amendments seen by Reuters, “to provide (tax) certainty” the government has extended tax breaks until March 31, 2041 to foreign companies that provide equipment to their contract manufacturers in India.
India introduced the tax exemption for foreign companies in February, valid only until 2031, after Apple lobbied the Indian government to modify its income tax laws to ensure the company is not taxed for ownership of the high-end iPhone machinery it provides to its contract manufacturers.
Apple had feared that, unlike in China, tax laws in India could treat ownership of machinery supplied to its contract manufacturers as so-called “business connection,” exposing its iPhone profits to tax.
Tax Break for Storing Components
The extended tax exemption will apply to manufacturers of mobile phones, tablets, laptops, hearing, and wearable electronic devices, according to the draft bill that will have to be passed by the lower and upper houses of parliament.
India has also exempted from tax foreign companies’ income from storing and providing parts used to manufacture such electronics components to contract manufacturers until 2041.
The rule will apply for factories and warehouses set up in so-called customs-bonded areas — which are technically considered being outside India’s customs border. If devices are sold within India from such factories, they will attract import taxes, making such facilities attractive only for exports.
“The proposed tax changes will enable foreign companies to store and transfer critical equipment and components in India for their contract manufacturers, helping mitigate supply chain disruptions arising from trade uncertainties while providing greater tax certainty,” Riaz Thingna, a partner at Grant Thornton Bharat, told Reuters
Data Centers
India has also proposed to make it easier for foreign companies that use data center services in the country to make use of tax exemptions.
India in February announced a tax exemption until 2047 for foreign companies using data centers in the country to provide services to global clients, addressing concerns that New Delhi could in future tax their global income for using such facilities.
The bill now allows data centers to be leased, rather than be owned by the Indian partners of foreign companies.
Allowing Indian partners to lease, rather than own, data centers will lower capital requirements and make it easier for smaller and mid-sized players to enter the market, said Thingna.
MacDailyNews Take: May India convert these proposals into law ASAP!
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The Varta crisis has entered another severe phase after the German battery manufacturer lost the customer responsible for nearly all production at its specialized factory in Nördlingen.
Varta has not publicly identified that customer, but reports from German media and industry sources point to Apple. The iPhone maker is reportedly moving battery orders for a future AirPods generation to a lower-cost supplier in China.
The decision will lead Varta to stop producing rechargeable button cells in Nördlingen during fall 2026. Approximately 350 jobs will be eliminated across the factory and the company headquarters in nearby Ellwangen.
Describing the development as a complete corporate collapse would go too far. Varta continues operating other battery businesses and recently completed an extensive financial restructuring backed by Porsche. The loss of Apple, however, has destroyed the economic foundation of a production site created around one highly influential customer.
Varta Crisis Exposes Dependence on Apple
The Varta crisis illustrates how a large technology customer can transform a supplier and then leave it with capacity that cannot easily be reassigned.
Varta became an important producer of CoinPower lithium-ion cells, small rechargeable batteries designed for wireless earbuds and other compact devices. Teardowns of AirPods Pro models identified Varta cells inside the earbuds, although Apple does not publicly discuss most component suppliers by product.
Demand from premium wireless headphones helped Varta expand rapidly. In 2020, its Microbatteries and Solutions division generated approximately €508 million in revenue, representing growth of 49% from the previous year.
The company invested heavily in production as wireless earbuds became a mass-market category. Apple demand provided the volume needed to justify specialized lines, equipment and hiring in Germany.
That dependence became dangerous when AirPods production weakened and Apple began adding other battery suppliers. A factory developed for unusually large orders could not operate efficiently once those orders declined.
The customer now leaving Nördlingen had previously accounted for nearly the entire capacity of the site. Varta says it has gained other customers, but their combined demand is not sufficient to keep the specialized factory running.
The plant is therefore closing not because rechargeable button cells have disappeared, but because replacing one customer of Apple scale requires far more than several smaller contracts.
Price Reportedly Decided the AirPods Order
German reports indicate that price was the decisive factor behind the supplier change.
Varta battery quality was reportedly equal to or better than the competing product. The German manufacturer could not, however, match the cost offered for the next generation of cells from China.
Battery production in Germany faces higher labor, energy and operating expenses than many Asian manufacturing centers. Chinese suppliers also benefit from extensive domestic electronics supply chains, access to materials and production volumes spread across numerous customers.
Apple has enormous leverage when negotiating component contracts. AirPods ship in sufficient quantities for a small difference in the cost of each battery to produce substantial savings across an entire product cycle.
The company regularly qualifies multiple suppliers for components when technical requirements and available capacity permit. Competition can reduce prices, protect production against interruptions and prevent one manufacturer from gaining excessive influence over the supply chain.
For Varta, that process brought the opposite effect. The supplier expanded to serve Apple and then faced declining utilization as the customer divided orders among additional manufacturers.
The latest move appears more final. Varta expects the contract to expire at the end of October, removing the volume that kept Nördlingen economically viable.
Image Credit: Apple Inc.
Apple Supplier Strategy Is Not Simply About China
The reported decision does not mean Apple is moving its complete production network toward China.
Apple has spent several years expanding device assembly and component production in India, Vietnam and other countries. AirPods manufacturing has grown in India, while Macs, iPads and wearables are assembled across a wider group of Asian locations.
The Varta case concerns a particular component for which a Chinese supplier reportedly offered a more competitive price. It shows that diversification away from one country can coexist with cost-driven sourcing from that same country.
Apple may reduce its dependence on Chinese final assembly while continuing to purchase Chinese batteries, displays, enclosures or electronic components when suppliers provide the required scale and pricing.
That balance creates a difficult environment for European manufacturers. Political interest in domestic technology production does not guarantee that major customers will accept higher component prices.
Premium engineering can protect a contract when it produces a measurable advantage in battery capacity, safety, dimensions or lifespan. Once competing suppliers reach comparable performance, procurement decisions become increasingly sensitive to cost.
The Varta crisis suggests that manufacturing location and supplier history carried less weight than the economics of the next AirPods battery.
Varta Was Already Fighting Financial Failure
Apple did not create every problem affecting Varta.
The company entered the current dispute after years of debt, costly investments, volatile customer orders, supply-chain problems and weaker demand in parts of its energy-storage business. A cyberattack in early 2024 also disrupted production and delayed financial reporting.
Varta warned that its earlier restructuring plan might fail after Apple reduced AirPods production. By mid-2024, the company had reached a point where it could no longer service its debt without another intervention.
A pre-insolvency restructuring reduced financial liabilities from approximately €485 million to €200 million. Porsche and majority shareholder Michael Tojner agreed to provide new capital, while creditors supplied additional financing.
Existing shareholders lost their investment as Varta was removed from the stock market. The process preserved the operating company but demonstrated how little financial room remained for another major disruption.
Varta reported a loss of €64.5 million for 2024. Although that was an improvement from the previous year, the business remained dependent on successful restructuring and stronger performance from its surviving divisions.
The Apple contract loss therefore did not independently bring down a healthy battery group. It struck a manufacturer that had already narrowly avoided insolvency.
Image Credit: Wikipedia
Porsche Cannot Protect Every Varta Business
Porsche participation gives Varta a future in automotive batteries, but it does not rescue the Nördlingen button-cell operation.
The automaker invested in the restructuring and took control of the V4Drive business, which develops high-performance cylindrical lithium-ion cells for hybrid and performance vehicles. Porsche gains greater access to battery technology while helping retain part of that expertise in Germany.
Varta also continues producing household batteries and energy-storage systems. Those businesses serve different customers and do not depend on the machinery used for tiny CoinPower cells.
Employees affected by the Nördlingen closure may be offered positions at other locations, although Varta has not indicated how many can realistically be transferred. The company and its works council are negotiating measures for the workers whose roles will disappear.
The shutdown leaves a modern production unit without enough demand only a few years after wireless earbuds were presented as one of Varta most promising growth markets.
Its remaining automotive operation now has the security of a strategic customer with a direct ownership interest. The microbattery division learned the cost of building a factory around a customer that never made the same commitment.
Taiwan Semiconductor Manufacturing Company (TSMC), a major Apple supplier and the world’s largest contract chipmaker, has reported an outstanding second-quarter performance that underscores the relentless momentum in the artificial intelligence sector.
According to Reuters, TSMC posted a 77% jump in second-quarter net profit on Thursday, beating market forecasts and hitting a record high, driven by surging global demand for its artificial intelligence processors.
“TSMC, the world’s largest contract chipmaker, posted a 77% jump in second-quarter net profit on Thursday, beating market forecasts and hitting a record, riding the wave of surging global demand for its artificial intelligence processors,” Reuters reports.
Taiwan Semiconductor Manufacturing Co. saw April-June net profit rise to T$706.6 billion ($21.99 billion).
The results significantly outperformed expectations. The profit handily beat a T$632.6 billion LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.
MacDailyNews Take: This strong performance highlights TSMC’s pivotal role in the global semiconductor supply chain, powering everything from advanced AI chips to consumer electronics. As demand for high-performance computing continues to accelerate (particularly for AI applications) TSMC’s results signal robust health not just for the company, but for the broader tech ecosystem.
TSMC’s record quarter serves as a powerful reminder of the transformative impact of artificial intelligence on the global economy.
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According to the company’s latest report, Apple Silicon-supplier TSMC posted second-quarter revenue of approximately T$1.27 trillion (about $39.62 billion), marking a robust 36% increase from the same period a year earlier. This result slightly exceeded analyst expectations and set a new quarterly record, driven primarily by surging demand for AI applications.
For June alone, revenue climbed an impressive 67.9% year-on-year to T$442.68 billion, up 6.2% from the previous month. The strong showing pushed first-half 2026 revenue to NT$2.4 trillion, reflecting 35.6% growth.
Why This Matters for Apple
Apple relies heavily on TSMC for the cutting-edge processors that power its flagship devices, including the A-series and M-series chips in iPhones, iPads, and Macs. The Taiwanese foundry manufactures Apple’s most advanced silicon on leading-edge process nodes—technology also in high demand for AI accelerators.
This interdependence became particularly evident in Apple’s own Q2 fiscal 2026 results (ended March 2026), where the company reported record revenue of $111.2 billion. However, iPhone supply was constrained by limited availability of advanced chips from TSMC, even as demand for the iPhone 17 lineup was described as “explosive.”
TSMC’s latest revenue beat signals strong momentum in the semiconductor ecosystem that directly benefits Apple. As TSMC ramps up production of next-generation nodes (including preparations for 2nm processes), it positions Apple to deliver even more powerful, efficient devices in upcoming cycles, including enhanced AI capabilities across its product lineup.
Broader Context: AI Driving the Semiconductor Renaissance
TSMC’s performance isn’t isolated. The company serves as the foundry backbone for the AI revolution, producing chips for Nvidia’s GPUs and Apple’s custom silicon alike. With AI demand showing no signs of slowing, analysts expect TSMC to potentially raise its full-year guidance when it reports full Q2 earnings on Thursday.
For investors and tech enthusiasts, this news reinforces a key theme: companies with deep exposure to advanced chip manufacturing — like Apple through its close TSMC partnership — are well-placed to capitalize on both consumer innovation and enterprise AI growth.
TSMC’s shares rose modestly ahead of the data release, continuing a strong year that has seen the stock gain around 57%. As the earnings call approaches, all eyes will be on forward guidance and how the foundry plans to balance AI priorities with partners like Apple.
MacDailyNews Take: TSMC’s record quarter isn’t just good news for Taiwan’s tech sector, it’s a bullish indicator for Apple’s innovation pipeline and the broader tech industry’s AI-fueled future.
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