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Xiaomi to Partner with Component Manufacturers for Local Production

Xiaomi aims to draw its supply chain partners to invest about $2.5 billion to set up local production facilities for smartphone components in India

Xiaomi is currently in talks with two new component manufacturers to set up production units and support its growing smartphone business in India. Manu Kumar Jain, Vice President, Xiaomi Global and Managing Director, Xiaomi India informed about the ongoing discussions.

The India MD told ET that the company was yet to finalise things. With the rising business in India, Xiaomi has been exploring potential ways to draw component manufacturers to the country. It had, reportedly, brought about 50 of its supply chain partners from China and Taiwan to assess the opportunities to kickstart local production.

Xiaomi’s suppliers invest in local production

The Chinese smartphone brand was aiming to draw investments from its suppliers in the native land and Taiwan. Xiaomi had earlier projected that these suppliers would invest around $2.5 billion (Rs 15,000 crores) in India’s production facilities. Among the suppliers, Holitech Group emerged the first one to start working on its upcoming plant in Andhra Pradesh. It has planned to invest around Rs. 14,000 crores in the next 3 years to locally produce camera module, touch screen panel, TFT (thin film transistor), flexible printed circuit and fingerprint module exclusively for Xiaomi.

Xiaomi’s focus on start-ups

“We are investing in a lot of start-ups. This is a key focus area for us,” Manu Kumar Jain was quoted by ET. Over the past few years, Xiaomi has been investing in more than 10 start-ups across India. It has further planned to invest about $1 billion in 100 Indian start-ups over the next 5 years to create an ecosystem of apps around the brand.

Xiaomi has six manufacturing facilities for smartphones and one unit for power banks in Andhra Pradesh, Tamil Nadu and Noida. It recently started its first-ever SMT (Surface-mount technology) plant in collaboration with Foxconn to begin printed circuit board or PCB assembling in Sriperumbudur, Tamil Nadu.