Xiaomi unveils 3 new smartphone plants, key component unit in India

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NEW DELHI : Chinese smartphone maker Xiaomi on Monday announced the opening of three more smartphone plants in India -- along with the company's first Surface Mount Technology (SMT) plant in Chennai that will manufacture printed circuit board assembly (PCBA) units in the country.

A PCBA is one of the most important components of the smartphone and contributes to nearly 50 per cent of the value of the device. Earlier this month, the government imposed a 10 per cent tax on imports of key smartphone components, including PCBs.
Speaking at the first-ever "Supplier Investment Summit" in the capital, Manu Jain, Vice President - Xiaomi Global, and Managing Director - Xiaomi India, said the company is one of the pioneers in the country to start local assembly of PCBAs.
"Xiaomi's high-quality, well-designed products at 'honest prices' have been instrumental in disrupting the Indian smartphone industry. I believe we will continue to play a key role in transforming India into a global manufacturing hub," Jain told reporters here.
Xiaomi, which now has six smartphone manufacturing plants in the country -- its biggest market after China -- did not disclose the financial details for setting up the new plants.
The three-day summit was attended by over 50 global smartphone component suppliers, with the aim of helping them set up local manufacturing units in the country.
"If all the suppliers set base in India, this would potentially bring in an added investment of over Rs 15,000 crore and create 50,000 job opportunities," the company said.
The summit was inaugurated jointly by Niti Aayog CEO Amitabh Kant, DIPP Secretary Ramesh Abhishek and Invest India CEO Deepak Bagla.
"In the last four years, we have scrapped several rules, regulations and procedures for investors like Xiaomi and others to come and invest in India," Kant said on the occasion.
"We realised that manufacturing in India has to be part of the global supply chain. All Xiaomi phones are made for the global market. Today, we have the most open economy for foreign direct investment (FDI)," Kant added.
The three new smartphone plants -- in partnership with Foxconn -- are located across campuses in Sri City, Andhra Pradesh, and a new campus in Sriperumbudur, Tamil Nadu. The factories with Foxconn now employ more than 10,000 people -- of which more than 95 per cent are women.
"Additionally, all of the assembly work is done by women. The new factories will result in an increased production capacity of two smartphones per second during operational hours," Xiaomi said in a statement.
Xiaomi expects to ramp up its PCBA production to close to 100 per cent of its locally-produced phones within the third quarter of the calender year 2018.
According to Tarun Pathak, Associate Director at market research firm Counterpoint, Xiaomi's PCBA announcement should make it the second largest brand in terms of value addition in India after Samsung.
"The move should increase Xiaomi's value addition from single digit to close to 15 per cent," Pathak said.
According to CounterPoint, the total local value addition for smartphone players in the country has increased from 5.6 per cent in 2016 to 10 per cent in 2017.
With an overall market share of 26.8 per cent (as per Q4 IDC Quarterly Smartphone Tracker 2017), Xiaomi is the number one player in the online smartphone segment with 57 per cent market share and the number two player in the offline space, with 11.2 per cent market share.

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