Companies
Samsung weighs setting up 5G gear production hub in India
Summary
- The South Korean conglomerate is considering India alongside Vietnam for its plans.
NEW DELHI : Samsung Electronics Co. Ltd is evaluating making India a hub for making 5G equipment as it weighs alternatives to China for expanding production, three people aware of the development said. The South Korean conglomerate is considering India alongside Vietnam for its plans.
“The industry, which makes 5G equipment, is currently in China, and due to the situation right now, it is such that further expansion of the company is not possible. There is no choice but to move out of China anyway. Other than Vietnam, India is the top prospect as a replacement for having the factories in China," a top executive from a trade body said on condition of anonymity. The person added that the plan is still at an early stage and might need time to materialize.
A second person in the manufacturing industry said Samsung has been successfully making various consumer electronics products, including smartphones, in India for a long time, which is one reason it considers the country for telecom gear as well. “The scale may not be big, to begin with, but we have a ready market in India, for not only 5G but 4G, and in the future, for higher generation of gear," the person said.
Queries sent to a Samsung spokesperson remained unanswered.
Samsung already has agreements to supply 5G equipment to India’s top two carriers, Reliance Jio Infocomm Ltd and Bharti Airtel Ltd, along with Nokia Corp. and Ericsson, which have been their suppliers for long. “Nokia and Ericsson are already making their network equipment, including radios, in India. They’re expanding capacities as well to handle the demand. It’s only logical that Samsung also follows suit," said Gareth Owen, associate research director at Counterpoint Technology Market Research. Nokia makes on its own, while Ericsson has partnered with Jabil.
The Indian government is offering incentives to companies making telecom gear locally under the production-linked incentive scheme that began in 2021. While Samsung did not apply then, Nokia and Jabil are availing of incentives, which are a percentage of the value of goods locally produced.
Samsung is also a ‘trusted source’ for telecom gear supply approved by the National Security Council Secretariat (NSCS), which would benefit the company since India does not allow Chinese suppliers to provide telecom equipment to Indian companies due to national security concerns amid geo-political tensions.
“In the absence of Huawei and ZTE, Samsung, as a trusted supplier, has been able to corner some of the market in 4G. 5G provides a bigger opportunity," Owen said.
India has a large base of skilled workforce within the telecom supplier ecosystem, another analyst said on condition of anonymity. Samsung plans could also gel well with India’s ambitions to export India-made telecom gear to global players, he said. “Samsung has been vocal about its plans and on openRAN (Open Radio Access Network). Somewhere down the line, India’s push to supply openRAN or ORAN through IndiaStack could align with those of Samsung’s for exports," he said.
India could become the base for exports to Southeast Asia, the Middle East and Africa.
