Mediatek’s Chairman Ming-Kai Tsai has assured the Indian government that the Taiwanese company will quickly address the shortage of chipsets faced by domestic brands like Micromax, Lava and Karbonn. He said that the company is closely working with Indian brands to ramp up supply of chipsets.
As per the Economic Times, Tsai has written a letter to the Indian government promising to improve chipset supplies and reiterated the company’s commitment to growing the Indian handset ecosystem.
He also highlighted the global shortage of components which are required for a smartphone chipset.
Indian handset makers had alleged that the Taiwanese chipmaker was diverting a major portion of chipsets to Chinese smartphone makers when there is a global shortage of components, impacting their local operations. They had said that the chipset shortage is as severe as over 95% of their overall requirements.
Indian companies had said that the ongoing disruption had threatened their ability to meet targets under the production-linked incentive scheme, thereby dampening their prospects to avail incentives in the first year.
MediaTek, which has a commanding market share in the sub-$200 smartphone segment, denied the allegations and said that it always engages equally with its global customers and partners to supply them with chipsets.
Indian brands reportedly said that chipset supply is still short of their overall requirements even after MediaTek increased supply over the last few days.
“It has improved, but there is still a long way to go,” a top executive at an Indian smartphone maker was quoted as saying.
According to various media reports, China’s Huawei had placed bulk orders for chipsets to circumvent a ban imposed by the US government which coupled with the COVID-led supply chain disruption has resulted in a shortage of chipsets to smartphone makers globally.
In his letter to India, Tsai said the global shortage of components was impacting all smartphone makers.
Micromax, Lava and Karbonn, approved by India under the PLI scheme for exports, are also trying to make a comeback in India’s smartphone market eyeing an opportunity amid negative sentiments against some Chinese brands.
In November, Micromax, which launched its first comeback smartphone, hasn’t been able to fulfil the demand due to the components and chipset shortage. On the other hand, Lava International is also working on its smartphone comeback and will soon launch a new series of smartphones.
Handset manufacturers recently said they have not been able to build capacities at their existing and new facilities due to supply chain disruption and late approval under the PLI scheme, which is already running delayed by two months.
These manufacturers will have to achieve the industry’s target exports worth Rs 50,000 crore ($6.76 billion) under the scheme. However, they expect to exceed last year’s exports worth Rs 27,400 crore ($3.7 billion).
“The industry is suffering right now as there is a shortage of semiconductor chips and raw materials and it is already impacting the targets,” Pankaj Mohindroo, chairman India Cellular and Electronics Association (ICEA) previously told Indian media. ICEA represents Apple, Foxconn, Wistron, Pegatron and Indian brands like Lava and Micromax.