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MeitY Drafting a Scheme Focusing on Inviting Display Fabs in India

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The ministry has invited response to Expressions of Interest (EoI) from display fabs to set shop in India. China leads the display manufacturing vertical with more than 70 per cent share in LCD manufacturing

The Ministry of Electronics an IT (MeitY) has invited display fabs to send response to EoI to setup display manufacturing units in India. These responses to the EoI, as the ministry noted, may be used to formulate a scheme around setting of display fabs in the country.

It is worth mentioning here that displays constitute a significant portion of the total Bill of Materials (BoM) in electronic products. For instance, displays account for over 25 per cent of the BoM in case of smartphones and over 50 per cent in case of LCD / LED TVs. India’s display panel market, as per MeitY, is estimated to be $7 Bn and is expected to grow to $15 Bn by 2025. Current requirements are met exclusively through imports.

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India, in terms of display fabs, only has the likes of TXD, CSOT, Holitech and LCE. But these companies also do not manufacture displays here and operate small display packaging units. South Korean giant Samsung has announced investment worth around Rs 5000 crore to setup display manufacturing in India but the company will only be assembling displays and not manufacture them from scratch here.

How big is the market here

Taking only TVs and smartphones in consideration, the market for displays in India is one of the biggest in the world. India’s smartphone shipments, as per Counterpoint research grew nine per cent YoY to reach over 53 million units in Q3 2020. Similarly, the value of India’s television industry, as er Statista, was estimated to reach 13.6 billion U.S. dollars in 2021. It was valued at just over ten billion dollars in 2017. Television was part of the brown segment of consumer durables in the country. TV penetration increased to reach 66 pe recent in 2018, diversifying into the semi-urban and rural areas where 109 out of 197 TV sets belonged to rural India. The sales of other consumer electronics that house display screens like smart wearables, laptops, PCs, tablets and more is a different story altogether.

The display manufacturing ecosystem is largely dominated by the companies originating from China, Japan, Taiwan and South Korea. China is notably dominating the LCD production with over 70 per cent share while the OLED market is largely dominated by Samsung and LG. Other notable companies in the arena include BOE Display, Sharp, TCL, Toshiba, and Innolux. It is to be noted here that the Chinese have been ramping up efforts in manufacturing OLED displays as well.

Now, the government of India looks keen to attract display fabs and billion in investment for setting up display manufacturing units in the country. As a matter of fact, the government has been on a roll launching Production Linked Schemes for almost anything electronic. These schemes are aimed towards making India aatmanirbhar (self dependent) in terms of manufacturing electronics.

“As per estimates from ELCINA, the electronic components manufacturing sector suffers from a disability of around 10 per cent due to the lack of adequate infrastructure, domestic supply chain and logistics; high cost of finance; inadequate availability of quality power; limited design capabilities and focus on R&D by the industry; and inadequacies in skill development,” read a note released by MeitY.

It continued, “Given this and the capital-intensive nature of display manufacturing, there is a need to incentivize the industry to set up Display FAB facilities in India.”

What’s the eligibility criteria

Like most other PLI schemes announced by the government, companies seeking to apply for this EoI will also need to meet eligibility standards defined by MeitY (though the scheme has not been announced yet). The first and foremost condition to apply includes possessing relevant IP and technology for setting up and operating a Display FAB. Companies that can show an intent to enter into ToT / purchase agreement(s) with an entity(ies) which possesses relevant IP and technology for setting up and operating a Display FAB, also qualify to submit response to the EOI.

Applicants should also have at least five (5) years of experience in running a commercial Display FAB facility. Companies that have entered / show an intent to enter into ToT / purchase agreement(s) with an entity(ies) which has five (5) years or more experience in running a commercial Display FAB, also qualify to submit response to the EOI.

The companies submitting an response to the EoI are required to list out requirements in terms of land, water and power. The other list of requirements that companies need to submit includes the kind of support they expect from the government. MeitY has notified the last date of submissions as 30th April 2021.

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Mukul Yudhveer Singh
Mukul Yudhveer Singh
Mukul Yudhveer Singh is an Editor at EFY. He’s an experienced business journalist who is both an enthusiast and a cynic of technology. Believes in data, as well as hunch-based journalism. He defines journalism as- reporting facts which help the audience take their own decisions, not ones that influence them!

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