Is display manufacturing the next big thing for India?

In December 2021, the Centre announced a Rs 76,000 crore scheme for semiconductor and display fabrication. The scheme is being viewed as largely successful, as India has approved one chip fabrication (Tata Electronics) and three chip packaging (US-based Micron, Tata Electronics & CG Power) plants. Over the last two and a half years, the focus has remained solely on the semiconductor ecosystem. The display sector has been largely neglected, despite India being the world’s third-largest consumer of display products (accounting for 7% of global revenue).
 
The global display market is forecasted to reach $187.8 billion in 2023, with an expected growth rate of 3.5% CAGR until 2028, according to research firm MarketsandMarkets. This surge in demand is attributed to the widespread adoption of OLED panels across diverse sectors such as automotive, healthcare, television, digital signage, integrative displays, and the emergence of foldable and flexible display technologies.
 
The bulk of the world’s display manufacturing is concentrated in Asia, spanning across China, Japan, South Korea, and Taiwan. As per research firm Statista’s findings for the year 2023, China maintained its dominance in producing LCD display panels, commanding a 69% share of the market. Taiwan followed with a 24% share, while Japan and South Korea held 5% and 2% shares respectively.
 
India heavily relies on China for its display needs, as there is currently no domestic display manufacturing industry established within the country. Super Plastronics Private Limited, a contract manufacturer of TVs in India is sourcing the display panel from China. Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd told Business Today, “This dependency is not unique to SPPL, as the entire global market relies heavily on China for open cell manufacturing. All the major open cell manufacturers are based in China, making it the sole source for these critical components.”
 
Despite the desire for diversification, the existing realities of the supply chain restrict sourcing options for displays to a single country. This dependence emphasises the urgency of strategic initiatives aimed at establishing alternative sources in other regions, with potential future developments in India being a key consideration.
 
It is imperative for India to prioritise the pursuit of display manufacturing, similar to its approach with semiconductors. Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA), says “We have an excellent system of 50% capex support on pari passu basis as offered by India Semiconductor Mission (ISM) further supplemented by the state governments, but we have not been able to break ground beyond display assembly. Display has a major 15% to 20% position in the Bill of Material which is close to the other logic, memory and other semiconductors. It’s a matter of great concern. This sector needs special attention and we are determined to make India a strong display manufacturing nation.”
 
 
Industry experts have expressed that although there are currently no display manufacturers in India, there are encouraging discussions and plans suggesting that within the next 3-4 years, one or two display manufacturing facilities might be established in the country.
 
These initiatives are integral to a broader effort aimed at enhancing India’s electronics manufacturing capabilities. The establishment of display manufacturing in India holds the potential to substantially diminish dependency on imports and bolster the local supply chain. This aligns perfectly with the government’s vision of augmenting domestic production and fostering technological self-reliance within the electronics sector.
 
For instance, Anil Agarwal-led Vedanta Group has applied for display fab under the scheme for semiconductor and display fabs. The company was believed to have filed a fresh application as its application under the old scheme wasn’t approved. And earlier this month, Vedanta had acquired Tokyo-based AvanStrate Inc, the manufacturer of glass substrates primarily used in the production of electronic devices such as televisions, laptops, smartphones, tablets, wearables and other electronic displays. With this acquisition, Vedanta is now strategically positioned to establish an integrated fab for display glass and panels, catering comprehensively to the fast-growing electronics manufacturing industry.
 
Akarsh Hebbar, Global Managing Director of AvanStrate Inc, said, “AvanStrate’s display offerings include glass substrates for TFT LCD panels used in consumer electronic devices, automotive displays, and medical equipment. As a wholly owned subsidiary, AvanStrate will serve as a strategic asset for Vedanta as the conglomerate looks at playing a critical role in India’s journey towards becoming self-reliant in electronics manufacturing.”
 
SPPL has also been actively encouraging 2-3 major display manufacturers to set up their operations in India. “In one case, the arrangement was nearly finalised, but a technology partner withdrew, causing a temporary setback. However, the initiative is still progressing, with new partnerships being explored,” adds Marwah.
 
Given the potential market size, technological capabilities, and supportive policies, investing in display manufacturing technologies and units in India could yield significant long-term benefits for both investors and the Indian economy and thereby realising the nation’s vision of Atmanirbhar Bharat in this high tech industry.