In a bid to boost its manufacturing capabilities, Xiaomi has announced the opening of three new plants – including the company’s first SMT (Surface Mount Technology) plant aimed towards local manufacturing of PCBA (Printed Circuit Board Assembly) in India. The announcement was made during the company’s first “Supplier Investment Summit” event held in New Delhi. The three-day summit will be attended by over 50 global smartphone component suppliers and that will help them familiarise with the Indian manufacturing ecosystem.
“We’re staring the new SMT plant for a PCBA assembly in India”, Manu Kumar Jain, Xiaomi’s Managing Director for India, told reporters. The SMT plant, which doubles as a smartphone manufacturing unit, has been built with the help of Foxconn – the world’s largest contract manufacturer of consumer electronics. Printed circuit board assembly, also known as PCBA, is seen as the most crucial component of the smartphone, and contributes to nearly 50 per cent of the value of the mobile phone. Other than Xiaomi, South Korean major Samsung is another company that assembles PCBA in India. Xiaomi expects to increase its PCBA production to 100 per cent of its locally produced phones within the third quarter of 2018.
The three new smartphone plants are located across campuses in Sri City, Andhra Pradesh and a new campus in Sriperumbudur, Tamil Nadu. The factories built with Foxconn now employ more than 10,000 people, according to Xiaomi. The company says it has also started manufacturing smartphones at its power bank plant in partnership with Hipad Technology in Noida, Uttar Pradesh. The manufacturing unit was set-up in November 2017. The move to strengthen its local manufacturing units in India comes at a time after the government imposed a 10 per cent duty on key smartphone components, including printed circuit boards.
“Xiaomi’s PCBA announcement should make it the second largest brand in terms of value addition in India after Samsung”, Tarun Pathak, Associate Director at Counterpoint Technology Market Research, told indianexpress.com. Pathak believes that it should increase their value addition from single digit to close to 15 percent. “This is critical for Xiaomi as sourcing and ironing out supply chain issues is very critical for its product planning”, added Pathak.
The establishment of new local manufacturing units in the country will help Xiaomi to increase its footprints in India, which has become an unbeatable force in the smartphone market. Xiaomi surpassed Samsung to become the number one smartphone vendor in the Q4 2017 for India, according to the latest data available from International Data Corporation (IDC).