In a move that will help Chinese handset maker Xiaomi further its expansion in India, its key component suppliers, Holitech Technology has announced to set up a plant with an investment of Rs 1400 cr ($200 Mn) over three years.
It will locally produce camera modules, touchscreen panels, TFT (thin film transistors), flexible printed circuits and fingerprint modules exclusively for Xiaomi, starting January 2019, according to company chief executive Flame Chen.
The company plans to produce 50 million components each year. By the end of third year, it will make 100 million units of each component.
Besides, the plant will create around 6,000 jobs in the state of Andhra Pradesh. Xiaomi India head Manu Kumar Jain said that the local sourcing of these components will help reduce the prices of its smartphones in India and push Make in India programme.
It also plans to buy components from other local players if they supply quality material.
In India, after being at the top for two quarters in the smartphone segment, Samsung outrun Chinese handset maker in April-June quarter. It claimed to shipped 10 million smartphones in the quarter, said a Counter Research data.
Industry experts termed the Xiaomi move as sensible one as it will allow the firm to have greater control and flexibility on the supply chain.
The company is expecting $2 billion in revenue from India from its supplies. At present, Xiaomi has six manufacturing facilities for smartphones and one unit for power banks spread across Andhra Pradesh, Tamil Nadu and Noida (UP).
Now after raising $4.5 billion via IPO in Hong Kong stock exchange, Xiaomi plans to invest in Internet services, especially IoT space, and also gets into the premium smartphone segment in India.
Jain in an interview had said that the company plans to invest 30 per cent of the raised amount in the global expansion and India is an important market which will receive investments too.
Recently, it launched MiCredit in India to offer loans up to Rs 1 lakh. This year, Xiaomi made two announcements on video content, the launch of largely-discussed Mi TV and hardly-covered partnership with Sourav Ganguly-backed short-format video content platform Flickstree.