Xiaomi has captured the largest shares of Indian mobile phone market, after taking the position of Samsung. It has set 3 new manufacturing plants in India, which includes its first Surface Mount Technology (SMT) production facility to assemble PCBs for mobile phone. This decision is taken after the 10% custom duty on pre-loaded PCBs by Government of India.
In collaboration with phone assembly giant Foxconn, the three plants have 10,000 employees of which 95% are women. The decision of making and populating PCBs in India is now growing with among manufacturers. Oppo and Vivo have also started planning on this direction.
SMT production line technology has already been with many EMS in India, but those were not of this much dense and quality production was something which is required for manufacturing of mobile phones, especially if it is a very thin margin competition. A typical SMT production line costs around 10Cr INR. What this initiative means ? This is a huge impact on the current development of everything we have in India. Here are few points.
- We already have been manufacturing PCBs and assembling them, but those were typical cost oriented PCBs and with lots of manual operations.
- Most of the cheap electronic items, like amplifiers, chargers, lightning equipment, camera equipment were sourced from China and were sold at very thin margin. Which now will again start to be manufactured again.
- Yes again (in above point). Many quality production houses were in India but had to shut the manufacturing and assembly process due to wafer thin margins in competition with China’s manufacturing capabilities.
- The circuitry is what the key is in an Electronic equipment and most of them are in form of PCBs which is greater the 50% cost of the overall equipment. Now with an opportunity to beat with the 10% price gap, this wafer thin margin has gained and now production of many things can resume.
- Most of the PCBs used in LED lights are already manufactured in India now they have opportunity to manufacture the drivers as well which they used to source from outside.
- This initiative will encourage many EMS in India to revamp their quality of production and start gaining grip on the market.