Samsung India on Monday announced a mega expansion plan for its mobile production unit located in Noida, claiming the top slot in the global pecking order in terms of capacity. The Korean electronics major, which had to recently give up the top spot in the Indian smartphone market to Chinese rival Xiaomi, is ready to expand its current capacity of 68 million units a year to 120 million by 2020. The facility would be the world’s largest mobile manufacturing factory once it is completed, Samsung executives said.
Going beyond Prime Minister Narendra Modi’s flagship 'Make in India' campaign, Samsung is pitching the expansion plan as a global initiative, calling it ‘Make for the world’. PM Modi, along with the President of South Korea Moon Jae-in inaugurated the plant at Noida on Monday.
“There is hardly a household in India, where Korean products are not found today. This new facility that will export 30 per cent of its total production is a perfect blend of Korea’s manufacturing capabilities and India’s expertise in the field of software technology,” said Modi. Highlighting India’s latest success in mobile manufacturing, he further said, “the total number of production units have gone up to over 50 in Noida in the last few years. Online transactions are growing fast and cheaper mobile handsets and data rates are boosting the digital transformation. Samsung has also played an important role”.
Currently, facilities in India manufacture some 10 per cent of the handsets made globally, according to government data. It aims to take it to 50 per cent by 2021.
Expansion at the Noida facility, at a cost of Rs 49.15 billion, is expecetd to generate 5,000 direct jobs and over 30,000 employment opportunities. According to Yogi Adityanath, chief minister of Uttar Pradesh, the promptness shown by Samsung India to take up the project is impressive. “We had signed an MoU in May last year and now we are here at its inauguration,” he said. The plant, once completed, will lift Samsung’s export capabilities from India. It aims to feed fast growing markets in West Asia and Africa from the plant. South Korean President Mon Jae-in said, “over 50 component vendors from India and Korea will be suppling to the plant”.
Expansion of its current plant comes at a time when Samsung is facing intense competition from Xiaomi, which has rapidly expanded its local sourcing and increased offline retail reach. The Korean major lost the top spot in the smartphone market in September 2017 to the Chinese rival and currently holds the second spot with 25.1 per cent—behind Xiaomi’s 30.1 per cent.
However, while it is totally dependent on third party manufacturers for production of handsets—globally as well as in India—Samsung is focused on in-house manufacturing. The company has a global R&D center in India as well.