Days after the government imposed 10 percent duty on Printed Circuit Board (PCBs) and other components in India, Xiaomi today unveiled three new smartphone manufacturing plants in the country, along with its first unit for local manufacturing of PCBs.
At its first-ever Xiaomi Supplier Investment Summit in India today, the Make in India torchbearer amongst smartphone companies Xiaomi announced three new plants in the country for local manufacturing of its smartphones. The event was attended by over 50 global smartphone component suppliers and several dignitaries including Amitabh Kant (CEO, Niti Aayog), Ramesh Abhishek (Secretary of DIPP) and Deepak Bagla (CEO, Invest India), among others.
With the addition of the three new smartphone manufacturing facilities, Xiaomi now boasts a presence of six manufacturing plants in India. Last year, the company started local manufacturing of power banks, at its first such unit in the country in partnership with Hipad Technology in Noida, Uttar Pradesh.
In line with its Make in India plans, Xiaomi’s first SMT (Surface Mount Technology) plant dedicated towards local manufacturing of PCBA (Printed Circuit Board Assembly) units is located in Sriperumbudur, Tamil Nadu, in partnership with Foxconn. The new facility has a total campus area of 180 acres.
The new factories with Foxconn now employ more than 10,000 people, of which more than 95 percent are females. Xiaomi further reveals that the new units will result in an increased production capacity of two smartphones per second during operational hours.
On the sidelines of the announcement, Manu Kumar Jain, Vice President, Xiaomi Global and Managing Director, Xiaomi India said, “Xiaomi’s high-quality, well-designed products at honest prices have been instrumental in disrupting the Indian smartphone industry. In 2015 we extended our long-term commitment to the Indian market by joining the ‘Make in India’ programme. Today we are deepening this commitment with three more smartphone factories and our first SMT plant dedicated towards local manufacturing of PCBA units. Xiaomi is one of the pioneers in the country to start local assembly of PCBAs, and I believe we will continue to play a key role in transforming India into a global manufacturing hub.”
Earlier this month, the government increased the import duty on three components used in mobile phones – printed circuit board (the motherboard), camera modules and connectors. Among these, the PCBA is one of the most important components and contributes to nearly 50 percent of the value of the phone.
The government’s move is aimed at boosting local manufacturing. Xiaomi expects to ramp up its PCBA production to close to 100 percent of its locally produced phones within Q3 CY 2018. This would allow the manufacturer to keep the costs of the smartphones low, without having to pay an additional fee as import duty.
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Xiaomi’s first local manufacturing plant, in partnership with Foxconn, was set up in 2015. Two years later, it set up the second plant, with the third plant established last year which is dedicated to manufacturing power banks. The company claims that every phone sold in India is made in India.
The debut summit is also aimed at educating suppliers about Indian manufacturing ecosystem, and helping them set up local manufacturing units in India. If the suppliers start manufacturing locally, it is estimated to lead to one of the biggest ever single investment in the electronic manufacturing industry and also create a number of jobs. It is estimated to bring in an added investment of over Rs 15,000 crore ($2.5 billion) and create as many as 50,000 job opportunities in the country.