The government of Andhra Pradesh on Monday signed a memorandum of understanding (MoU) with Holitech Group to set up a manufacturing unit in Tirupati. The new facility will manufacture key smartphone components which previously had to be sourced from outside. The new unit will manufacture components solely for Chinese smartphone maker Xiaomi.
The manufacturing unit will produce five major components that are needed to make a complete smartphone unit — Compact Camera Modules (CCM), Thin Film Transistor (TFT), Capacitive Touch Screen module (CTP), Flexible Printed Circuits (FPC) and fingerprint sensors.
This is the first time a facility has been setup in India to manufacture these different components. Xiaomi says this is a big step forward in creating an ecosystem that will further push the ‘Make in India’ initiative.
Xiaomi expects the new manufacturing unit, spread across 75 acres, will bring in an investment of $200 million (or approx Rs 1,400 crore) over three years. Close to 6,000 jobs will be created benefiting the people of Tirupati.
The plant is expected to kick start in Q1 2019. The initial plan is to produce 50 million component sets per annum, the company said. The move comes shortly after Xiaomi India organised a first of its kind global Supplier Investment Summit in April 2018. The summit was initiated to encourage its top 50 global suppliers to manufacture in India.
Xiaomi currently has six smartphone manufacturing facilities spread across the country in partnerships with Foxconn and Hipad Technology. Earlier this year, the company announced the first SMT plant dedicated towards local manufacturing of PCBA units in Chennai, Tamil Nadu.
Xiaomi is the second largest smartphone brand in India. According to Hong Kong-based research firm Counterpoint, Xiaomi held a market share of 29 per cent in the second quarter of 2018, which makes it ahead of Vivo, Oppo and Honor.
Smartphone manufacturing in India is on the rise and continues to grow. India replaced Vietnam to become the second largest producer of mobile phones in 2017. Last month, Prime Minister Narendra Modi claimed that 4 lakh people have been employed by mobile manufacturing companies in the past four years.
The Indian government imposed a 10 per cent on import of PCBA and key smartphone components early this year to make it the country a manufacturing hub and create new jobs. Samsung, Honor, Vivo, and Oppo also manufacture smartphones in India locally.