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World's Largest Mobile Phone Factory Set to Open in India

July 9, 2018
The new Samsung factory will have the capacity to fabricate 120 million smartphones per year.

Samsung Electronics Co., the South Korean maker of Galaxy phones, said it is opening the world’s largest mobile phone manufacturing facility on the outskirts of the Indian capital, as smartphone demand surges.

The factory will be inaugurated by Indian Prime Minister Narendra Modi and South Korean President Moon Jae-in at 5 p.m. local time. Both leaders are visiting the facility adjoining New Delhi, according to India’s ministry of external affairs.

“The opportunity is just massive," said Faisal Kawoosa, who heads new initiatives at researcher CMR Pvt. “Such a large facility will help Samsung cater to the huge demand in a country of 1.3 billion people where there are only 425 million smartphone users."

Since taking power in 2014, Modi has pushed his "Make in India" initiative, which encourages companies to set up plants in the country, as the nation attempts to bolster domestic manufacturing. India attracted the highest ever foreign direct investment in the past year with inflows totalling $62 billion.

India’s smartphone market grew 14% with total shipments of 124 million units in 2017, the fastest pace of growth among the top 20 markets, according to International Data Corp. Demand for new phones is surging in India, helped in part by billionaire Mukesh Ambani offering $23 4G feature-phones, free voice services and cheap data plans. Chinese smartphone maker Xiaomi Corp. said in April it will set up three more factories in India.

The new Samsung factory will have the capacity to fabricate 120 million smartphones per year, and make everything from low-end smartphones that cost under $100 to the company’s flagship S9 model, according to the company.

Indians favor low-end smartphones priced at $250 or less, given the low average annual income of its people, according to Bloomberg Intelligence. That’s one reason why Apple Inc. has struggled to gain market share in India, with most iPhone models priced beyond $500, according to a Bloomberg Intelligence report earlier this month.

Last year, India overtook the U.S. last year to become the world’s second-largest smartphone market after China. There will be 780 million connected smartphones in 2021, compared with 359 million in 2016, according to a study by Cisco Systems.

By Anurag Kotoky and Saritha Rai

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