Asus’s India Expansion
Taiwanese laptop giant Asus has revealed its intentions to relocate crucial component suppliers from its primary manufacturing hub in China to India, supporting the Modi government’s Make-In-India initiative. The company is partnering with contract manufacturer Flex to establish a new factory in Chennai, capitalizing on India’s revamped Rs 17,000-crore production-linked incentive (PLI) scheme for IT hardware.
Asus’s Expansion Strategy in India
Asus, with a market valuation of $15 billion, is determined to significantly expand its production operations in India, leveraging the government’s PLI scheme. This strategic move aligns with the company’s anticipation of rapid demand growth within the Indian market, even as China, the United States, and major Western markets grapple with economic slowdowns.
Peter Chang, the general manager for Asus’ Asia Pacific System Business Unit, expressed the company’s unwavering commitment to India, emphasizing that Asus is one of the fastest-growing notebook brands in the country. The plan is to expand product offerings and business operations in response to India’s expanding business scale and market potential.
Currently, Asus sources approximately 80% of its production from China, while the remaining portion comes from Taiwan, Brazil, Europe, and Indonesia. Chang envisions India becoming the second or third-largest manufacturing site globally for Asus in the coming years, thanks to the growth facilitated by the PLI scheme.
Diversification and Market Share in India
Originally known for its gaming laptops in India, Asus has diversified its product portfolio and currently holds an 18% share in the consumer notebook market, along with around a 5% share in commercial notebooks and consumer desktops. The company has also expanded its presence from online channels to offline retail.
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Confidence in India’s Growth Potential
Chang expressed his confidence in the revamped PLI scheme for IT hardware, highlighting the investment and localization milestones it mandates. Asus is actively scouting for local vendors to supply critical components such as PCB (printed circuit board), memory units, and chassis, both within India and among its existing suppliers in China, Taiwan, and Korea.
The Indian Market and Future Plans
The Indian computer market recorded sales of approximately 10-11 million units last year, and Chang believes it has the potential to rival China’s market, which currently sells around 25-30 million units. While recognizing India’s growth potential, Asus intends to cater to local demand before considering exports. Chang emphasized, “There is sufficient demand here, which needs to be met first. Only after that, we can consider exports.”
Asus’s strategic decision to relocate key component suppliers to India is poised to strengthen the country’s position as a manufacturing hub for electronics and aligns with the government’s vision of making India a global manufacturing destination
