Samsung’s display arm begins production of mobile display in Noida

Smartphone major Samsung has started production of mobile display at its Noida manufacturing facility from this month, and will soon ramp up the production to make IT displays.

“Samsung Display Noida Private Limited has started production from April. Currently, it is making only mobile displays at the Noida factory,” a person familiar with the matter told ET.

The UP government had previously approved special incentives to Samsung Display Noida Private Limited, which is making an investment of Rs 4,825 crore to relocate its mobile and IT display production unit from China to NCR in Uttar Pradesh, giving a boost to India’s bid to expand local manufacturing, especially at the cost of China.

Samsung Display Noida Private Limited declined to comment on the development.

Samsung already has a big mobile manufacturing unit in Noida, which was inaugurated by Prime Minister Narendra Modi in 2018. Samsung had then committed Rs 4,915 investment for the factory.

Analysts said that the move sends a positive signal to the entire display ecosystem and will help attract smaller ecosystem players to the country.

“The move will give confidence to smaller players in the broader display ecosystem to come to India and set up operations. Samsung is one of the largest players. It gives a signal to the overall supply chain that this component is ready for manufacturing,” Tarun Pathak, associate director at Counterpoint Research said.

Pathak said that display is going to be more critical for mobile phones, tablets and Internet of Things (IoT) devices. “The BOM cost will also increase. Display is a high value addition product with 15-18% price contribution towards a smartphone. Not all will be sourced in India but it is a good starting point.

Samsung currently makes more than 70 percent of the total display products used in TVs, mobile phones, tablets, watched, etc., in the world in South Korea, Vietnam and China.

Beijing BOE Display Technology Co., Ltd, Tainma, LG Display and JDI are some other prominent display makers in the world. “Korean, Japanese, and Chinese brands are in space. Initially it will start on the assembly side and the process will increase,” Pathak said.

The UP government previously said that the Noida display unit was the first “high-technique project” and India will be the third country in the world to have such a facility. Over a period of time, the unit is expected to generate direct employment of 510 persons besides giving indirect employment.

The UP state government is making financial provision of Rs 250 crore for this project during five years. Samsung will get financial incentive to the tune of Rs 460 crore under the India government’s Government of India’s Scheme for Promotion of Manufacturing Electronic Components and Semiconductors (SPECS).

Pathak added that it needs to be seen the level at which Smasung is building the unit and preparing for production since there are certain other components involved. “With the PLI scheme, the local value addition can hit 25-30% over a period of time from 12-13% presently.”

Samsung along with Apple partners Foxconn, Wistron and Pegatron recently received approval from the Indian government under the production-linked incentives scheme. All these multinational companies were approved to avail incentive for producing mobile phones with invoice value Rs 15,000.

Samsung, which has plans to produce handsets worth over $40 billion in India under the PLI scheme, is the only handset company to have met its PLI targets for FY20-21 while other 15 approved companies have struggled to meet targets and asked the government to treat year 2021-22, instead of 20-21, as the first year for production targets.