Samsung Display, a flat-screen supplier to Samsung Electronics Co, said on Monday it was considering building a factory in India with a $500 million investment as parent Samsung Electronics seeks to expand smartphone production there.
Under the plan, Samsung Electronics will provide ₹3,500 crore in loans and transfer a parcel of land in Noida for ₹92 crore to its display unit, Samsung India Electronics Private Ltd said in a filing dated Jan. 3.
Samsung Electronics started making smartphones in Noida on the outskirts of the capital New Delhi in 2018. Last year, it stopped production in China where it had to contend with competition from domestic rivals.
The new display factory will help Samsung Electronics secure local supplies of one of the most expensive smartphone components at a time when the South Korean firm is also struggling to fend off competition from Chinese rivals in India.
Samsung, the second-biggest smartphone vendor in India after China's Xiaomi Corp saw its market share fall to 20% in the country in the third quarter, from 25% three months earlier, showed data from researcher Counterpoint.
Smaller Chinese rivals Vivo and Realme boosted their share of the market, one of the world's fastest-growing.
The Indian government is considering a plan to offer subsidized loans to mobile handset manufacturers in a bid to attract Apple Inc. and Samsung Electronics Co.’s suppliers to open factories in the country, Bloomberg had reported earlier.
It also includes setting up of industrial zones equipped with taxation and customs clearance, along with infrastructure such as roads, power and water supply, the official said.
The government wants to attract overseas component makers and help boost the share of manufacturing in Asia’s third-largest economy to a quarter of the nation’s gross domestic product.
Foxconn Technology Group, the largest assembler of Apple handsets, is ramping up manufacturing of iPhones in India. It already has two factories in the southern Indian states of Andhra Pradesh and Tamil Nadu, where it makes devices for Xiaomi and Nokia. Adding more production in India would help Apple and Foxconn diversify from China amid ongoing trade tensions with the US.