Samsung reportedly evaluating making telecom gear in India

Samsung is reportedly evaluating making telecom gear in India, as manufacturers see increasing geopolitical risk in China. Samsung may have to wait for more orders in India as well as from overseas before making such a decision.

Mint quoted a source from a trade body saying that although the telecom equipment manufacturing industry is presently located in China, the current circumstances make it impossible for Samsung to expand there. Consequently, relocating from China is inevitable. Besides Vietnam, India stands out as the most promising option for establishing new factories to replace the ones in China.

Another source told Mint that the scale may not be large initially, but India is a large market not only for 4G and 5G but for the future generation of telecom gear.

In February 2021, India introduced the PLI scheme for manufacturing telecom and networking equipment with an outlay of INR121.95 billion (US$1.46 billion). Samsung did not participate in the scheme as Samsung had only an Indian customer, Reliance Jio, which did not make a case for the company to invest in manufacturing, and Reliance Jio has been building its own end-to-end 5G design and manufacturing capabilities.

Still, India launched another round of a telecom and networking gear PLI scheme in June 2022, which included a design-led PLI scheme, inviting applicants from design-led manufacturers and others to avail incentives for five years. Samsung, among Nokia, Ericsson's partner Jabgil, Flex, Tejas Networks, VVDN, and HFCL, participated in the 2022 round of the PLI scheme.

Besides Reliance Jio, Samsung in earlier this year announced it had signed an agreement with India's second-largest mobile operator, Bharti Airtel, for 5G network deployment.

In addition to mobile phones, India is looking to build an export hub for telecom and networking gear. Ashwini Vaishnaw, India's communications minister, said in January that India has become the second-largest manufacturer of mobile phones. In the next 2-3 years, the country will also emerge as a major telecom equipment exporter.

Currently, Samsung assembles mobile phones and displays in the northern state of Uttar Pradesh and makes home appliances, TVs, and other components in Tamil Nadu in southern India.

Source: DIGITIMES Research, May 2023