Asus ropes in Flex to set up India factory

NEW DELHI: Taiwanese laptop major Asus is getting its key component suppliers from China, its biggest manufacturing location, to India as the company sets up a new factory in Chennai through its contract manufacturer Flex, in a boost to the government’s ‘Make in India’ initiative.
Banking on the government’s revamped Rs 17,000-crore production-linked incentive (PLI) scheme for IT hardware, the $15 billion Taiwanese company, which earlier manufactured some of its products at a factory in Noida, is now working on a plan to aggressively expand production in India. It expects demand to grow rapidly here, while China, US and the major Western markets witness a slowdown.
“Asus is one of the fastest-growing notebook brands in India and we will now expand our product line-up and business operations here in line with the growing scale of business as well as market potential,” Peter Chang, general manager for Asus’ Asia Pacific System Business Unit, told TOI here.

The company currently gets almost 80% of its production from China, and the rest through Taiwan, Brazil, Europe, and Indonesia. “As we expand in India in line with the PLI scheme, this country may emerge as the second-largest, or at the most third manufacturing site for us globally over the next few years.”
Asus, originally operating in India through gaming laptops, has been expanding its product line-up and currently has an 18% share in the consumer notebook business, while having around 5% share in commercial notebook and consumer desktops. “Originally, we were present through the online channels, but are now expanding in offline as well.”
Chang said the company is encouraged by the revamped PLI scheme for IT hardware, investment and localisation milestones mandated in that. “We took our time to understand the policy and how to comply with the provisions therein, after it was announced. We now feel comfortable with the scheme, which has prompted us to ramp up our local production plans.”
The company is scouting for local vendors for key parts, such as, PCB (printed circuit board), memory units, and chassis. “We need to find suppliers here and are also talking to our vendors in China, Taiwan and Korea.”
The Indian computer market saw sales of around 10-11 million units last year, and Chang said it has the potential to gain scale of China, that currently sells around 25-30 million units. “While India is a growing market, the Chinese market has come down significantly.” Chang said there are no immediate plans to export from India as most of the manufacturing will be used for local usage. “There is sufficient demand here, which needs to be met first. Only after that, we can consider exports.”