Not long ago, Samsung built a new mobile phone factory in Noida, India. This is Samsung's second factory in India. According to official reports, this will be the world's largest mobile phone factory to date, reaching a maximum of 120 million units per year. The production of mobile phones. Prior to this, Samsung had invested a lot of production resources in mainland China and other places, but with the slowdown in the domestic market, Samsung also put its eyes and strategic focus on the Indian market.
In the past year or two, Apple and Foxconn, as well as a number of domestic mobile phones, have plans and actions to invest and build factories in India. As early as last year, Apple focused on hand-picked Wistron's new generation of iPhones in India. Wistron is expanding its capacity in the ODM mobile phone factory in the suburbs of New Delhi, India. In addition, Wistron is building a new mobile phone manufacturing plant in Bangalore, India. In January this year, two government officials from India said that Wistron is about to Signed a new land lease agreement with the Indian government, the new land will be mainly used to build new plants, and more models for Apple OEM.
As early as 2016, the Foxconn Group had signed an agreement with the local government of India to invest $5 billion to build a factory. In December last year, it was reported that Foxconn planned to operate the Gawalar-Nehru Special Economic Zone near Mumbai, India. JawaharlalNehruPortTrust) Invested 600 million rupees (about RMB 6.154 billion) to build a 200-acre factory. Foxconn said it can provide about 40,000 jobs locally.
From the perspective of domestic mobile phone manufacturers, almost all Chinese mobile phone manufacturers have set up factories in India, such as vivo, OPPO, Xiaomi, Jinli, etc., and they have invested in factories in India. Among them, Xiaomi already has two factories, in April this year. It said that three more factories will be built in India. More construction and supply chain construction are under planning.
International majors have moved to India, and India has a chance to strengthen its position in the industrial chain.
From these signals, India may transfer some of China's mobile phone manufacturing industry chain to India in the next few years, which will enable India's mobile phone production and assembly, research and development capabilities to be strengthened, which in turn may lead to China's mobile phone manufacturing industry. Competitiveness is weakened.
On the one hand, the transfer of the mobile phone manufacturing industry chain will have several drivers. One is business and demand driven, that is, the Chinese market has already appeared saturated, the incremental space is small, the replacement demand is slowing, but the Indian market There is also a huge demographic dividend. This has made many mobile phone giants already list India as a battleground. The demand for mobile phone inventory and increments in the Indian market is large, in order to quickly operate the localization and reduce costs, and efficiently increase shipments. Demand, mobile phone manufacturers will basically consider setting up factories in India. Why? Because India has a population of 1.3 billion, the penetration rate of smartphones is only 30%, that is, where is the demographic dividend, where is the demand, and the factory is related to the mobile phone manufacturing industry? Where will the supporting facilities be.
Secondly, the Indian policy welcomes foreign investment in setting up factories to solve the employment problem in India, and the Indian government is trying to attract more manufacturers to localize in India. The key strategy is to increase tariffs on the import of key parts of mobile phones, so that electronic manufacturers have more The reason for investing directly in India is to bring economic growth and create jobs for India. India has lower land rents, labor costs and equipment costs. On the contrary, domestic prices have also been pushed up indirectly. The cost of manufacturing, including labor costs, logistics costs, plant costs, etc., and mobile phone demand is slowing down. Therefore, the transfer of the mobile phone manufacturing industry chain originally belonging to the Chinese market to India may be an irreversible trend.
What impact will this have? First, it will drive India's mobile phone manufacturing industry chain cluster. This mobile phone manufacturing industry chain cluster has experienced in China in the past. Because OEM manufacturers need to rely on complex supplier industry support. Production, demand, environment, industrial ecology is very close.
As early as 2014, an American study titled 'Why Apple Produces iPhone and Almost All Products in China', The New York Times concluded that there are more intermediate engineers in China, with huge labor support and A huge factory that can immediately increase production, China is not lacking a one-stop high-tech enterprise. A former Apple executive told the New York Times: 'The entire supply chain is now in China. You need 1000 rubber washers. There is a factory next door. You need 1 million screws? There is a factory in the street. You need to make a small change to the screw? Three hours will do.
But why is the mobile phone manufacturing supply chain all in China? Of course, on the one hand, the development of China's manufacturing industry itself and the improvement of supporting facilities, but don't forget the other side, it is due to the early development of the smart phone market, China due to the economy. Development and large population are the world's largest smartphone market with the largest incremental space. It is precisely because of the huge demand, the manufacturing cost of mobile phone manufacturers need to compete for the demographic dividend of the Chinese market, so set up factories in China to improve the upstream and downstream of mobile phone manufacturing in China. The industrial chain has become an inevitable path, which can easily and smoothly realize localized production R&D, shipment, sales and marketing, and channel expansion. This has enabled Apple to invest heavily in the Chinese market, forming a supply led by Foxconn foundry. Chain cluster.
But now the Chinese market has reached saturation through the rapid development of 5-6 years. There is not much room for incremental growth. The largest incremental space is currently in India. According to a study by Cisco Systems, India will have 7.8 in 2021. 100 million connected smartphones, compared with 359 million in 2016.
Therefore, mobile phone manufacturers need to slowly transfer the relevant support of the mobile phone industry chain to India, because they can quickly enter the production of local and export markets in India by establishing a base in the fastest growing market for smartphones in the world. chain.
According to earlier industry reports, there are two ways for Chinese mobile phone manufacturers to enter India to build factories. One is to integrate production, processing and sales, and establish stable supplier partners to open up the market. The other is mobile phone ODM foundry. Pattern, OEM enters India.
India may therefore have a chance to strengthen its mobile phone industry chain. The data shows that there are nearly 100 mobile phone related companies in India. In the next 3-5 years, mobile phone core component manufacturers will gradually migrate to India. India may also replicate the road China has traveled before, and will gradually and slowly realize the cluster of mobile phone industry chain.
According to the data, Foxconn currently has five manufacturing plants in Sri City, Andhra Pradesh, India, and nearly 15 million smartphones per year for millet, Nokia, Gionee, and InFocus. Foxconn India is still working for Nokia. OEM smartphones and feature phones, manufacturing smartphones for other manufacturers.
In the modern economy, industrial agglomeration determines the status of manufacturing. According to a statistics, the iPhone raw material and parts supply chain comes from 31 countries, of which China has the largest number of suppliers, reaching 349, the camera model in the Apple mobile phone. Group, PCB circuit board, antenna, FPC flexible printed circuit board, speaker, touch motor, glass cover, glass back cover, metal structural parts, precision connectors, etc. are all supplied by Chinese suppliers. This makes the major apples supply Chain manufacturers must set up factories in China. For example, 51 suppliers in Taiwan have 152 factories, 114 of which are in mainland China. 47 suppliers in the United States have 217 factories, of which 69 are located in China.
In the Chinese market, it is precisely because there is an integrated manufacturing cluster associated with the mobile phone industry that has enhanced the global position of China's mobile phone manufacturing industry. This status is even irreplaceable in the past, but in the future, this irreplaceable Will the status still continue to exist? This is worth our consideration.
At present, the United States shouts that the manufacturing industry is returning, and Foxconn Apple Samsung has transferred its factories to India. In fact, it is an early warning to China's manufacturing industry.
Manufacturing industry is an indispensable part of China's economic composition. Like India, China is also a populous country. Employment is the guarantee of economic stability. Manufacturing is the foundation of a country's employment. If there is no manufacturing China economy, In the mobile phone industry, the production of mobile phone parts and components has an important demonstration role in the transformation and upgrading of the overall manufacturing industry, because the domestic manufacturing industry has always been given a cheap, backward production capacity, the impression of low-end sweatshops, long-term It has been stigmatized since now. Young people in China are increasingly reluctant to flow into the manufacturing industry. Zong Qinghou, chairman of Wahaha, has complained before: The real economy tax is relatively high, the profit rate is very low and it is very hard, many people do not Willing to do the real economy. And in the smart phone industry,
For India, although it is facing the problem of skilled workers, the major mobile phone giants have shifted their focus to India. India also has the opportunity to absorb more sophisticated technology talents and accelerate the development of Indian mobile phone manufacturers to assemble and research themselves. The ability to make smart phones. For example, after we saw that Foxconn settled in Zhengzhou, Henan Province, it led the entire downstream of the mobile phone production line in Zhengzhou. The industrial cluster around Zhengzhou’s factory cluster was slowly formed. For India, when major manufacturers After settled in the area, India also has the opportunity to participate in the upstream R&D of the mobile phone manufacturing industry, driving the overall innovation and promoting the upstream and downstream industries of mobile phone production and development.
In the past, MediaTek also expressed its expectation for the Indian market, indicating that the main battlefield of system integration chips has shifted from China, where demand has slowed significantly, to India, Southeast Asia and other places. Because the replacement demand in the area will bring high growth rate.
In the Chinese market, there is another trend. Some practitioners have said frankly that after 2016, the production of mobile phone models, from the main control chip, memory chip to camera module and display and touch module and other core components. There is a trend of performance and overcapacity. Currently, there is a deeper demand for these core devices in the Indian and South Asian markets. The ratio of module after-sales purchase orders in India and South Asia is almost the module purchase of mobile phone assembly factories. The order is 1~1.5 times or more, and the ratio will be higher in the future.
This is not good news for the Chinese mobile phone industry chain.
As early as 2014, the Modi government of India put forward the slogan of 'Made in India' in a big way. Building a world manufacturing center is India's strategic goal based on the current national conditions and the future. In today's view, Indian manufacturing is gradually showing results.
From the market share of Indian smartphones, including India's Lava, Intex, Micromax and other brands, as well as Chinese mobile phone brand manufacturers Lenovo, Xiaomi, OPPO, vivo, etc., low-cost Android phones are still the main force in the market. Although the Indian mobile phone manufacturers Lava, Intex, Micromax and other brands have suffered from domestic mobile phones, their local mobile phone brands together with Samsung and domestic mobile phones constitute the main force in the Indian market. In the past, the Indian mobile phone market was competing with domestic mobile phones. The failure to compete with the product quality is also due to the lack of a local supply chain OEM cluster in India. Many Indian manufacturers such as Micromax rely on the foundry of Shenzhen to assemble and sell in India, but with the Indian industry chain. The development of Indian manufacturers has opportunities.
For Apple Samsung, the Chinese market is still unable to give up the market, but the future strategic shift may lead to damage to the Chinese mobile phone industry chain. This may be worthy of domestic reflection, is there any countermeasure? It is difficult, because China is not like the United States, Although the US manufacturing industry itself is declining, it has always been at the top of the technology R&D and accumulation and the discourse power of the industry chain. China's manufacturing industry is not the natural way of global expansion after the natural development of the United States. When the industrial base and technological development level of the industry is still at the development stage, capital, labor and talent are accelerating away from the manufacturing industry, and then flow to the real estate and Internet industries, the financial industry and other fields where money is coming.
The mobile phone industry is only a signal of the gradual outflow of the manufacturing industry. There are three trends worth noting. One trend is that Samsung, Toshiba, Panasonic, Sony and other manufacturing giants are considering reducing their capital in China and turning their attention to countries with lower costs. One trend is that the United States is also calling for American manufacturing to rob the manufacturing resources that originally belonged to China. It is worth noting that Americans have never given up manufacturing. The US manufacturing industry has always been a strong pillar of the US national economy. Native American manufacturing companies have been growing. Another trend is that domestic big companies are also running out, of course, this is also based on the need to open up foreign markets, the need for global competition.
However, it is necessary to reflect on the fact that in the era of manufacturing to the industrial 4.0 era, the low-end manufacturing outflow is an unstoppable trend, but the current problem is that China's manufacturing soil, cost, atmosphere and technical level are still insufficient. Supporting the development of high-end manufacturing industry, if the relative cost is lower, the market demand is greater, and the domestic lack of absolute dominant edge in the upstream technology level, then there will be more excellent manufacturing entity manufacturers to run more dividends in the future. Countries, the manufacturing supply chain and industrial ecology of these countries, once formed, means the formation of a new 'industrial public land' that adapts to the major factories, which is also weakening the competitiveness of domestic industrial chain clusters. This leaves us with more than just reflection, more of a crisis.