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Tianma sets up Indian subsidiary: what attracts domestic supply chain to India?

date: 2019-08-28
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Tianma Microelectronics Co., ltd. and its wholly owned subsidiary, Shanghai avionics electronics Co., ltd. will jointly invest about us $74,000 (500,000 yuan) to set up a subsidiary in India to meet the rapid development of Tianma Microelectronics Co., ltd. in the Indian market, display panel manufacturer Tianma Microelectronics said recently.Tianma microelectronics said that the investment to set up an Indian subsidiary is conducive to improving the regional market competitiveness of the company, effectively improving the company's ability to respond quickly to Indian customers and customer satisfaction, and further expanding the company's overseas business.


In fact, long before tianma, many domestic panel and module manufacturers set up subsidiaries or invested in India.In August last year, xiaomi supply chain manufacturer heitai announced to build a factory in India, becoming the first Indian manufacturer to produce thin-film transistor (TFT), camera module, capacitive touch module (CTP), flexible printing circuit (FPC) and fingerprint sensor.In January of the same year, tongxingda announced that it would set up LCD module and camera module factories in India.In December last year, TCL also started to build TCL industrial park in India and brought the module business of huaxing optoelectronics to India.


Industry chain upstream enterprises have left India, which cannot do without the support of terminal handset manufacturers.In fact, the Indian market has grown rapidly in recent years, becoming the world's third largest color TV market and the second largest mobile phone market.India's smartphone shipments grew 11% in 2018, making it one of the few high-growth markets globally, according to IDC.However, Chinese mobile phone manufacturers have been in India for a long time. Xiaomi, huawei, OPPO, vivo and others have all built production bases in India, and each product has a good performance in the market. Especially, xiaomi has occupied the top spot of Indian smartphone sales for six consecutive quarters.According to 2018 Indian smartphone market data released by well-known data agency Counterloint, xiaomi, vivo and OPPO alone have achieved a combined market share of 51 percent, with domestic handset manufacturers enjoying a boom in the Indian market.


And as demand continues to rise in the Indian market, so does demand for supporting industrial chains.In addition, since the end of 2017, the Indian government has made two tax increases to the pain of major handset manufacturers. The import tariff of mobile phones has been raised from 10% to 20%.However, while cracking down on foreign mobile phone manufacturers, the Indian side has made a series of preferential policies for foreign companies, which is undoubtedly a move to force the relevant industrial chain to move to India.


But editor thinks, from another Angle, this brings new opportunity for domestic mobile phone upstream and downstream industry chain.India is one of the few markets that can sustain rapid growth as the global mobile phone market stagnates or even goes into reverse.On the one hand, the rapid growth of India's population leads to increased market demand.On the other hand, India's 4G network construction is slow and smartphone penetration is not high, so the market still has great potential.For supply chain firms, cheap land and Labour costs are another boost.


Apart from India itself, the market environment in the whole South Asia is very similar to India in general, so there is also a huge market space.According to Counterpoint and CyberMedia, the Indian smartphone market is expected to grow by 12 percent in 2019, with 160 million units expected to be shipped, while the south Asian market with more than 1.8 billion people, including India, will see more than 220 million units shipped in proportion to the population.


Summary:


At present, the domestic mobile phone market is facing stagnation or even regression, domestic related industries are also looking for new development direction.As the world's third largest smartphone panel supplier, tianma's investment in India would be a positive sign that it may have become the industry consensus to be the first to enter the Indian market.But for domestic manufacturers, the cultural differences, poor infrastructure and uneven workforce still need to be addressed.The editors believe that although the current mobile phone industry chain in India cannot be compared with China in terms of completeness or human quality, with the development of the market and the improvement of the industry chain, India is likely to become a new industrial manufacturing base after China in the future.(coordinating editor: Simon)


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