Taiwanese laptop giant Asus is making substantial strides in support of India's "Make-In-India" initiative. The company has recently revealed its intention to shift essential key suppliers from its primary manufacturing hub in China to India. This strategic move involves collaboration with contract manufacturer Flex to set up a new manufacturing facility in Chennai.

Leveraging the Indian government's revamped production-linked incentive (PLI) scheme for IT hardware, which carries a value of Rs 17,000 crore, Asus is strategically positioning itself for growth in the Indian market.

Asus, boasting a market valuation of $15 billion, is poised for an ambitious expansion of its manufacturing operations in India. This decision aligns with the company's strategic reliance on the Indian government's PLI scheme. The move is driven by Asus's anticipation of robust demand growth within the Indian market, a stark contrast to economic slowdowns witnessed in China, the United States, and major Western markets.

Peter Chang, the General Manager of Asus' Asia Pacific System Business Unit, expressed the company's dedication to India in a statement to TOI, "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."

At present, Asus procures approximately 80% of its production from China, while the remaining share is sourced from Taiwan, Brazil, Europe, and Indonesia. Chang anticipates that India will ascend to the position of the second or third-largest global manufacturing site for Asus in the foreseeable future, propelled by the company's expansion efforts facilitated by the PLI scheme.

Originally renowned for its gaming laptops in India, Asus has successfully diversified its product portfolio. Currently capturing an 18% share of the consumer notebook market and approximately 5% in commercial notebooks and consumer desktops. The company's presence has expanded from online channels to encompass offline retail as well.

Chang expressed his unwavering confidence in the revamped PLI scheme for IT hardware, underscoring its prescribed investment and localization milestones. Asus is actively engaged in the search for local vendors capable of supplying critical components like PCB (printed circuit boards), memory units, and chassis. These suppliers may be drawn from within India or leveraged from the company's existing network in China, Taiwan, and Korea. Notably, the Indian computer market achieved sales of approximately 10-11 million units last year.

Chang believes that India holds the potential to rival China's market, which currently boasts sales ranging from 25 to 30 million units. While recognizing India's immense growth prospects, Asus is resolute in its commitment to fulfilling local demand before venturing into the realm of exports. Chang emphasized, "There is sufficient demand here, which needs to be met first. Only after that, we can consider exports."

Image source: TOI