India's Rising Electronics Sector

India's electronic sector grew from US$ 29 billion in FY14 to US$ 70 billion in FY19. This accounts for 3.3% of global electronic production. From 2 mobile manufacturing units in 2014 to 268 units in 2019, 95% of mobile sold in India are "Assembled in India". This sector is huge beneficial to Prime Minister Modi's "Make in India" program. India also became 2nd largest Mobile manufacturer surpassing Vietnam. India's mobile manufacturing share in World is 18%, though huge of them is Assembled End Product(AEP). India is manufacturing only 12% of Semi knocked down (SKD) components. The volume increased from 60 million in 2014-15 to 225 million in 2017-18. The Mobile assembly plant in India are-

  1. Micromax - Bhiwadi (Rajasthan), Rudrapur (Uttarakhand)
  2. Samsung - Noida, UP - Largest Manufacturing unit outside South Korea with an initial investment of ₹4195 crore.
  3. Lava - Noida, UP
  4. Apple - Foxconn (Chennai), Wistron (Kolar and Chennai), Pegatron (future by 2022), Foxlink (2021 in Noida)
  5. One Plus, RealMe, Oppo - Noida, UP
  6. Asus - Sri City, Andhra Pradesh and Daman
  7. Motorola, Huawei, Honor - Flex (Tamil Nadu)
  8. Nokia - Foxconn, Sri City, AP and Chennai
  9. Vivo - Noida, UP
  10. Xiaomi - Tamil Nadu, Andhra Pradesh, Uttar Pradesh
Contract manufacturers, OEMs, ODMs, Li-ion Battery makers and SMEs like Dixon, Videotex [Noida], Secureye [New Delhi], Radiant Appliances and Electronics Limited [Hyderabad], Innolux [Mumbai], DBG India [Bawal], Wingtech [Tirupati], Longcheer [Bawal], TSMT [Chennai], Sunwoda Electronics [Greater noida], BYD [SriPerumbudur], Huaqin [Noida], Avary Holding [Tamil Nadu], JLNPHENIX Energy [Noida], Hubei Yingtong [Yamuna Industrial Area] Flextronics Ltd [Singapore domiciled American EMS located in Bangalore, Chennai, Gurugram, Pune, Sri City, Sriperumbudur], Jabil [Ranjangaon MIDC near Pune] etc. have opened their facilities. ELCINA predicts Indian Electronics Contract Manufacturing will grow from US$ 23.5 billion in FY20 to US$ 152 billion by 2025.

LCD/LED TV manufacturing in FY18 is 16 million worth ₹26400 crore.

Samsung's new display manufacturing unit to setup in Noida with a cost of ₹5400 crore (US$ 700 million). India only has small display packaging units by vendors including Holitech [Greater Noida, June 2019], TXD [Bawal in 2018], LCE or LianChung Electronics [Noida, April 2019] and CSOT [Subsidiary of TCL in Tirupati, Dec 2019] from China. Finnish company Salcomp manufactures chargers at Chennai and Noida plants. Optiemus Electronics Ltd, a JV between Optiemus Infracom Ltd of India and Wistron Corp of Taiwan is also making mobiles, tablets. Based on IDC report, the average smartphone in India sells for $159 and 80% of devices sold are under $200. In FY20, India exported 36 million units of Smartphones worth ₹21000 crore compared to 17 million units exported in FY19. Imports decreased from 26 million units in FY19 to 2 million units in FY20. To push mobile manufacturing ₹41000 crore (US$ 5.82 billion) would be disbursed on PLI scheme. India imported smartphone components worth ₹25441 crore which need to be reduced. India's domestic mobile manufacturing industry touched ₹2.25 lakh crore (~US$ 31.25 billion) in FY20, jumped 10 fold from ₹18900 crore (US$ 3.1 billion) in FY15. The exports of consumer electronics goods have doubled to US$ 11.8 billion in FY20 from $6.4 billion in FY18. The electronics market valued at $120 billion in 2018-19 is segmented as Mobile Phones (24%), Consumer Electronics (22%), Strategic Electronics (12%), Computer Hardware (7%), LEDs (2%) and Industrial Electronics (34%) comprising of Auto, Medical and other industrial electronic products. Electronics production contributes 3.3% of India's GDP.

In CCTV manufacturing, China's Prama Hikvision has opened manufacturing unit in Vasai (2019) with an initial investment of ₹500 crore. In computer accessories sector India has companies likes of Intex, iBall, Zebronics, Frontech (Nuevotech Electronics) etc. Currently, 87% of laptops and 63% of tablets are imported mostly from China. China shares 66% of Global market which stood at $240.99 billion in 2019. Chinese brand Lenovo, whom IBM sold their Personal Computing division in 2004, manufactures laptop at their Pondicherry plant. Dell has manufacturing unit for laptops and desktops at Sriperumbudur near Chennai. USA and India are the only 2 countries that have all Dell's business functions and provide support globally.

Tejas Network is India's largest telecom equipment maker. Sterlite Technologies is India's largest Fiber Optics maker. HFCL ltd, formerly 'Himachal Futuristic Communications' has supplied 100000 Wi-Fi for BharatNet. VVDN Technologies is ODM manufacturers for 5G, WiFi, Camera, IoT. It manufactures Wireless Access point, P2P, P2MP connectivity solutions in 4 facilities in Manesar. With the introduction of 5G Technology, Internet Of Things, Automation, Healthcare, Defense Industry this sector can grow leaps and bounds. The National Policy on Electronics 2019 aims to promote domestic manufacturing and export in the entire value-chain of Electronics System Design and Manufacturing (ESDM) to achieve a turnover of $400 billion (₹ 26 lakh crore) by 2025.

One of the biggest challenge in the growth of India's electronics sector is fab manufacturing. To setup Fab manufacturing units like TSMC, GlobalFoundries, SK Hynix cost roughly 30-50 thousand crore rupees. Plus uninterrupted power supply and gallons of clean water. Vinod Dham, father of Pentium Chip suggested India should focus on Fabless system first.

Pure-Play Foundry - TSMC, GlobalFoundries, UMC, SK Hynix, SMIC

Fabless  System - Qualcomm, Nvidia, AMD

IDM (Integrated Device Manufacturer) - Intel, Samsung, Texas Instruments (design, Manufacture and Sell)



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