Made in India

Leading EMS Initiatives
Name of the company	Location	Description	Estimated Investment ($)
Aspocomp	Chennai	PCB manufacturing	200 mn
BPL	Bangalore	Handset manufacturing	2.2 mn
Ericsson	Chennai/Kukas	R&D faclity, global service delivery center/telecom equipment manufacturing	50 mn already invested, addition 50 mn earmarked
Elcoteq	Bangalore	Telecom manufacturing	100 mn, with significant sum invested during 2006
Flextronics	Chennai	Telecom hardware manufacturing	100 mn
Hon Hai (Foxconn)	Chennai	Mobile handset and components, and electronic hardware and related services	110 mn
Laird Technologies	Chennai	Mobile phone accessories	25 mn
LG	Pune	Handset manufacturing	Rs 500 crore over five years
Motorola	Chennai	Handset manufacturing	100 mn
Nokia	Chennai	Mobile handset manufacturing	200 mn
Perlos	Chennai	Mobile handset mechanics	30 mn
Salcomp	Chennai	Mobile phone chargers	8 mn
Samsung	Manesar	Handset manufacturing	15 mn
Sem India	Hyderabad/Chennai/Kolkata	A fab facility with strategic investing from AMD,Flextronics, AP and others	3.2 bn by 2009
Siemens	Hyderabad/Chennai/Kolkata	Telecom equipment	100 mn
Spice	Baddi, HP	Low cost handsets	23 mn
TAPP Semicondutor	Chennai	Production and packaging of chips	200 mn
Telcordia Technolgies	Chennai	Software and services for IP wireline and cable	30 mn
XL Teleocm	Hyderabad/Chennai/Kolkata	Capacity to 10,000 CDMA handsets in SKD facility	50 mn in phased manner
ZTE	Manesar	CDMA equipment supplier	NA
Source: V&D estimates

The China Factor
Any debate on EMS is incomplete without pondering over the might China has carved in this space. Experts believe that instead of comparing China with India, they say that it needs to be seen from a complimentary perspective. Says Motorola's Henry Mohan, "India and China together present one of the most attractive markets, and both the economies are on a high growth trajectory. Motorola entered China at the beginning of the growth cycle and since then, the company has widened its manufacturing operations there. In case of India too, Motorola has been among the early players to set up a state-of-the-art manufacturing facility. Like China, the government of India, too, has been supportive. India also presents a good ecosystem to support local manufacturing."

But, as we look at the road ahead, experts agree that India needs to fix the infrastructural issues. As the electronics manufacturing industry is in an infant stage, it also requires the government support in rationalizing taxes, so that local manufacturing is more cost effective than direct import. The companies in the EMS space also expect rapid improvement in infrastructure. Says Mohan, "Currently, the power tariff in India is twice as much as China. Moreover, labor laws should be refined in removing restrictions on employing contract labors and women working in three shifts. Component manufacturers need to be encouraged to set up manufacturing facilities in India to improve the supply chain ecosystem."

However, India has several advantages over China in terms of availability of skilled labor. But, looking from an overall Asia perspective, China will remain an undisputed king in manufacturing, but at the same time, India will emerge as the second biggest force in EMS, catering to domestic demands and becoming a hub for addressing other emerging markets. The outlook for EMS factoring the current dynamics remains bullish and it's on a high growth trajectory.

Shrikanth G
With inputs from Nilabh Jha
shrikanthg@cybermedia.co.in

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