As India plans to become a global manufacturing hub, a contract manufacturer of major Chinese smartphones here has said that while it becomes an “inevitable trend” for smartphone and other tech players to set up manufacturing bases outside China, the process is “not a transfer, but rather a copy of China’s supply chain”.
DBG Technology Co is a contract manufacturer for major Chinese smartphone brands including Xiaomi, Honor and Huawei Technologies Co.
Xu Yusheng, board secretary of DBG, said that the key incentive for setting up manufacturing capabilities in countries such as India and Vietnam is a reduction in tariffs.
“‘Made in Vietnam’ is never a replacement for ‘Made in China’, but an extension of that,” Xu was quoted as saying in the report.
He said that despite Covid-19 related disruption, China’s supply chain remains “irreplaceable”.
“The comprehensiveness of China’s (smartphone) supply chain, which is at the core of its significance, was made possible after two decades of development,” Xu said.
“We can easily get our hands on all the components, the testing equipment and everything else needed to make something from scratch, within one hour’s drive of our Huizhou factory. There’s no other place like this outside of China,” he emphasised.
Xiaomi recently decided to tap Vietnam as its latest production base.
The move “drew public attention as it followed similar moves by major global smartphone makers to move parts of their supply chain from China to Southeast Asia in search of lower costs and more stable production output”, the report said.
Apple moved some of its iPad production from China to Vietnam last month owing to Covid lockdowns.
Apple shipped nearly 1 million ‘make-in-India’ iPhones in India in the first quarter of 2022, a massive jump of 50 per cent (year-on-year) in iPhone shipments from within the country. The tech giant is also manufacturing iPhone 13, along with other models, in the country.
India, which aims to become a global semiconductor hub in coming years, is also set to pump $30 billion into its technology sector to achieve independence on chips so that it isn’t “held hostage” to global suppliers.
As India renewed its thrust on local manufacturing of electronics under the production-linked incentive scheme (PLI), Apple and Samsung alone were expected to manufacture/assemble smartphones worth around $5 billion in the financial year 2021-22.