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Samsung's Electronics Units Planning to Invest 420 Bil. Won in India
To Localize Smartphone Component Production
Samsung's Electronics Units Planning to Invest 420 Bil. Won in India
  • By Kim Eun-jin
  • May 8, 2019, 09:16
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Koh Dong-jin, president & CEO of Samsung Electronics' IT & Mobile Communications Division, introduces the Galaxy Note 9 in a launching ceremony held in Gurgaon of India on Aug. 22 in 2018.

Samsung Group’s electronics units are said to be planning to invest 25 billion rupees (US$360.35 million or 421.25 billion won) in smartphone production lines in India.

Samsung Display Co. and Samsung SDI Co. are planning to establish their local subsidiaries in India and invest 15 billion rupees (US$216.21 million or 252.75 billion won) and 9 billion to 10 billion rupees (US$129.73 million to US$144.14 million or 151.60 billion to 168.50 billion won), respectively, in building their production facilities in the country, according to industry sources and reports by India's leading business newspaper The Economic Times on May 7.

These investments seem to be intended to localize the supply of components to Samsung Electronics’ smartphone production plant in Noida, India, which is the largest in the world. Previously, Samsung Electronics invested a total of 49.15 billion rupees (US$708.45 million or 828.18 billion won) to expand the local plant. A completion ceremony was held in July last year with President Moon Jae-in and Indian Prime Minister Narendra Modi in attendance. The plant has an annual production capacity of 120 million units of smartphones and televisions.

In this regard, The Economic Times reported that Samsung Display has already signed a memorandum of understanding (MOU) to set up a plant to manufacture displays for cellphones by April next year, while Samsung SDI is in talks with the Indian government to construct a smartphone lithium battery production plant.

The two companies said they are considering building their production facilities to meet the demand from Samsung Electronics’ local plant and comply with the Indian government’s “Made in India” policy, but there are no set specific investment plans yet. An industry insider said, “Considering the size of the investments, the two companies seem to be pushing for the construction of module plants rather than complete local production.”

Industry watchers expect that Samsung Group will promote cooperation with local companies in various areas, including smartphones and electric vehicle (EV) batteries. Indian firms, including Mahindra, think highly of South Korean electric and autonomous vehicle components, such as EV batteries, so there is a possibility of additional investments.

Meanwhile, Samsung Electronics ranked second in terms of smartphone market share in India with 22.7 percent in the first quarter of this year, following China’s Xiaomi with 30.1 percent, according to market research firm Strategy Analytics (SA). The South Korean electronics giant has narrowed the gap with Xiaomi from 11.5 percentage points last year to 7.4 percentage points this year. The Indian smartphone market is the second largest in the world after China.