China’s TCL Group will soon kick off the production of mobile phone and television display panels at its factory in India’s Southern state, Andhra Pradesh, which also houses many other TV manufacturing facilities. The production unit will see a total investment of $219 million.
The 280,000-square-meter facility in Tirupati is TCL’s largest investment outside its home market so far.
The factory in Andhra Pradesh’s Tirupati will hire around 1,000 employees to begin production during the fourth quarter of the ongoing fiscal, delayed by over 18 months due to the ongoing pandemic, which led to shortages of raw material and manpower.
Mike Chen, General Manager of TCL India, said that CSOT (China Star Optoelectronics Technology), which is a TCL group company, will produce 8 million 32 inch to 75 inch TV panels and 30 million 3.5 inch to 8-inch mobile phone panels annually.
Out of 11 production lines, 5 will be allocated to TV panels and 6 to displays for mobile phones.
“We had announced an investment of $219 million in September 2019 to start manufacturing display modules in India. The plan was to start phase one operation in the second quarter of 2020, but the project encountered difficulties like shortages of raw materials, workers and equipment due to the pandemic,” Chena was quoted as saying by the Economic Times.
Korean major Samsung has already announced mobile and IT display production in India’s Northern state, Uttar Pradesh, investing Rs 4,825 crore ($660.96 million).
Smaller players Holitech, TCD and LCE also have their assembly factories in India but have limited production capacity.
The emergence of display panel assembly and manufacturing units will particularly help smartphone brands to cut costs. Last year the Indian government had levied a 10% basic customs duty on displays to attract more companies to start local production.
India’s display panel market is estimated to be around $7 billion and is expected to grow to $15 billion in just four years, by 2025, as per the Indian Cellular and Electronics Association (ICEA).
Pankaj Mohindroo, Chairman of ICEA, said that India currently consumes 7-8% of the global display production primarily for use in mobile, TV and IT hardware.
“With our current emphasis on electronic manufacturing in India and incentives to trigger this industrial sector, the demand for displays will increase multi-fold…this is the right time that we direct our focus towards building this strategic core industry in India,” he recently said during an industry event.
The industry has recently urged the Indian government to bring a “coherent national policy” to mobilize private sector companies to bring together capital and know-how to establish state-of-the-art display Fabs. It also sought financial incentives to display makers and display supply chain companies who agree to make substantial investments under the private-public partnerships.
TCL Chena, which is betting big on India’s TV market, said that the country has become the world’s third-largest TV market. ITCL is the seventh-largest selling brand in India and the fifth-largest television brand globally.
“Samsung, Xiaomi and other mobile phone and TV manufacturers, many of which are customers of TCL CSOT, all have factories in India. We launched the project in India to shorten the production cycle as well as the transport distance for the raw materials and improve the efficiency of the supply chain,” Chen added.