Xiaomi announces local manufacturing of PCBA in India

Xiaomi announced the opening of three more smartphone plants in India. Xiaomi has also started manufacturing smartphones at its power bank plant in partnership with Hipad Technology in Noida, Uttar Pradesh, resulting in a total of six smartphone manufacturing plants in India to date.

Marking a significant move in Xiaomi’s localization strategy, the company also announced its first SMT (Surface Mount Technology) plant dedicated towards local manufacturing of PCBA (Printed Circuit Board Assembly) units in Sriperumbudur, Tamil Nadu, in partnership with Foxconn.

Xiaomi made these announcements at its first-ever Supplier Investment Summit in India today where the company is hosting over 50 global smartphone component suppliers to educate them about the Indian manufacturing ecosystem, with the aim of helping them to set up local manufacturing units in India. If all the suppliers set base in India, this would lead to one of the biggest ever single investment in the electronic manufacturing industry, creating a big pool of jobs. It would potentially bring in an added investment of over 15,000 crore rupees ($2.5 billion) and create as many as 50,000 job opportunities in India.

The flag off ceremony of the summit today was attended by several dignitaries such as Amitabh Kant (CEO, NitiAayog), Ramesh Abhishek (Secretary of DIPP) and Deepak Bagla(CEO, Invest India). Day 1 of the summit also saw representation from Nara Lokesh (Minister of Information Technology, Govt of AP), Dr Dinesh Sharma (Deputy Chief Minister, Uttar Pradesh), Sanjiv Saran (Additional Chief Secretary of IT & Elec, Govt of UP), Josh Foulger (Country Head & MD, Foxconn), Changxing Wan (Country Head, Hipad India), and Pankaj Mohindroo (Chairman, Indian Cellular Association).

Xiaomi announced in 2015 that it was going to manufacture its devices locally in India, in a show of commitment to Honourable Prime Minister Shri Narendra Modi’s ‘Make in India’ initiative. Its first smartphone plant was built in partnership with Foxconn in 2015, followed by its second plant in March 2017, and its first power bank plant (in partnership with Hipad Technologies) in November 2017. To date, over 95% of Xiaomi smartphones sold in India are made in India.

The three new smartphone plants, built in partnership with Foxconn, are located across campuses in Sri City, Andhra Pradesh and a new campus in Sriperumbudur, Tamil Nadu with a total campus area of 180 acres. The factories with Foxconn now employ more than 10,000 people, of which more than 95% are females. Additionally, all of the assembly work is done by women. The new factories will result in an increased production capacity of two smartphones/second during operational hours.

With the first SMT plant dedicated towards local manufacturing of PCBA units in Chennai, Tamil Nadu, Xiaomi has also become one of the pioneers in the country to start local assembly of PCBAs. PCBA is one of the most important components of the smartphone and contributes to nearly 50% of the value of the phone. Xiaomi expects to ramp up its PCBA production to close to 100% of its locally produced phones within Q3 CY 2018.

The supplier summit starts today and continues until 11 April 2018. The component suppliers will be visiting the states of Uttar Pradesh and Andhra Pradesh to explore and learn about investment opportunities in India, incentives offered by Center and State governments, FDI policy, industrial policy and various state sector-specific policies. The objective of the summit is to educate Xiaomi’s global component suppliers about India’s smartphone industry and encourage them to establish local bases in the country.

Xiaomi has grown to become the number one smartphone player in India over the past three years, with an overall market share of 26.8% as per Q4 IDC Quarterly Smartphone Tracker, 2017. Xiaomi is also the number one player in the online smartphone segment with 57% market share and the number two smartphone player in the offline space with 11.2% market share as per Q4 IDC Quarterly Smartphone Tracker, 2017.