India is gearing up for a $ 400 Bn electronics market by 2025. To help achieve this aim, government schemes like Production Linked Incentive (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Electronic Manufacturing Clusters (EMC 2.0) have been launched with a cumulative incentive outlay of $ 7.5 Bn. More than 60% of this $ 400 Bn market is expected to be shared by mobile phones, laptops, PCs, and TVs.
Although the schemes aim towards domestic manufacturing of final products and localization of sub-assemblies and components, it is currently not possible to attain 100% value addition within the country. The import reliance for high value components like display units are proving to be a roadblock towards achieving self-sufficiency. Display units account for ~25% of the Bill of Materials (BoM) for smartphones and ~50% for TVs.
The Indian display market demand is expected to grow by 3 times to ~$ 19 Bn in 2025. To benefit from this increased demand, it is imperative to set up display FAB in India. This will help increase India’s integration in global electronic supply chain and cater to both domestic and international markets.
Opportunities in Display Market
The global display market demand is expected to reach ~$ 126 Bn by 2025. China, South Korea, and Japan control the bulk of the production in the display market, together making up the 65% of the global production. South Korea houses the display giants like Samsung Display and LG Display. Economies across the globe are trying to capitalize on the display demand. China is rapidly growing its production with currently 12 FABs under construction.
Rapid Pace of Technology Growth
LCD and OLED are the dominant technologies used in the display units. Contribution of LCD technology in the market is steadily decreasing from 90% in 2016 to an expected 60% in 2024. This shift in market share can partly be attributed to high-end applications adopting advanced technologies like OLED.
Despite this decrease, LCD is expected to retain significant market share owing to ease of production and cost competitiveness. Parallelly, a cumulative investment in OLED technology to the tune of ~ $ 30 Bn is pledged till 2023, with 11 new entrants since 2017.
Display FAB – A Strategic Policy Priority
To create a sustainable domestic electronic manufacturing ecosystem and to reduce India’s dependency on import of display products, the Ministry of Electronics and Information Technology (MeitY) invited Expression of Interest (EoI) for setting up Display Fabrication Units (FABs) in March 2021. The EoIs were floated with the objective to commence a dialogue with industry and eventually launch a display manufacturing scheme conducive to their requirements.
From a techno-economic standpoint, LCD appears to be the “low hanging fruit” for India’s display market. Establishing LCD display ecosystem will not just make India a global competitor in LCD technology but will pave the way for OLED manufacturing in future.
If India manages to develop self-sufficiency in display fabrications, the benefits to the nation will be manifold:
- Domestic value addition of >11 $ Bn from Year 5 of operations.
- New display export opportunities up to $ 10 Bn by Year 5 of operations.
- Domestic employment generation of 2,00,000 sustainable and high-tech jobs.
- Innovations in display-centric consumer products.
EoI is the first step in the direction of setting up display FAB in India. Government of India has engaged in extensive industry stakeholder consultation post notification of the EoI. As in case with most high technology manufacturing, an industry led approach to policy making is the best possible way to achieve 'Aatmanirbharta' in display manufacturing.
