脫 China Samsung and Apple suppliers move to India

Samsung Electronics and Apple’s partners, which have been producing products in China, are in full swing to move a manufacturing base to India after Vietnam. It has been manufactured in China with the advantage of labor costs cheaper than its own country, but the burden of labor costs has increased due to the recent rise in wages in China.

In addition, China is also likely to intensify the US-China conflict in the medium and long term. India also affected the fact that the smartphone penetration rate was low at 60%, and the possibility of growth is high.

Samsung Electronics, Apple, smartphone production proportion increases India… Responding to partners

An official in the electronics industry said on the 4th, The number of companies that have recently reduced the local production plant in China and moved to India are increasing. There are still many partners in Vietnam’s workplaces, he added.

Samsung Electronics is known to have planned to reduce Vietnamese smartphone production volume and increase Indian smartphone production volume from this year. In line with this, Samsung Electronics’ suppliers are also planning to move the production base to India.

Samsung Electronics’ smartphone production subsidiary is seven worldwide, including domestic Gumi. According to the industry estimates, Samsung Electronics’ production in smartphone regions last year was 50-60%in Vietnam, 20-30%in India, 10-15%in Brazil, 3-5%in Gumi, and 3-5%in Indonesia.

Samsung Electronics suffered production of Vietnam’s blockage to Corona 19 in the third quarter of last year. With this experience, Samsung Electronics has set a strategy to disperse the proportion of regional production so that it does not exceed 30%.

Apple’s majority partners are also expected to move their vitality to India. According to the Wall Street Journal (WSJ) at the end of May, Apple requested consignment producers to increase product manufacturing outside China.

According to market research firm Counter Point Research, 95.3%of Apple’s iPhone, iPad, and MacBooks were produced in China last year. The counterpoint predicts that India’s proportion of Apple’s product production will expand from 3.1%last year to 6-7%this year. Apple’s partners, Foxconn and Wistron, have already built an iPhone manufacturing factory in India.

Apple also suffered production disruption and supply chain due to China’s strong blockade due to Corona 19 earlier this year. This is why Apple turns out of China’s dependence and turns to other regions. In addition, as the US-China conflict has prolonged, it is impossible to relieve tension in production in China.

India, cheap labor costs… The possibility of smartphone growth is high

Above all, this is the reason why low labor costs in India are in the spotlight as a production base.

An official in the mobile industry said, The labor costs between India and China are 5-6 times different. The salary of the manufacturing factory engineer of Indian smartphone suppliers is higher than the average salary (380,000 won per month) of all employees of India.

In addition, while the growth rate of smartphone growing around the world is in stagnation, India is still highly likely to grow. India is the second largest market in the global smartphone market after China. According to market research firm Starita, the penetration rate of smartphones in India last year is 61%. The penetration rate is significantly lower than that of 80-90%in China and the United States. This means that there is a lot of new demand in the future.

Counterpoints recorded 38 million smartphone shipments in India in the first quarter of this year, down 1% from the previous year. The global smartphone shipments are not decreased compared to the recession in the first quarter, compared to the 12% decrease in Europe in the first quarter.

In addition, the annual smartphone production is expected to decrease this year due to the shrinking consumer sentiment such as the Russian-Ukrainian war and inflation, while the counterpoints are expected to increase 4% over the previous year.