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Samsung has started production of mobile display panels at its Noida factory this month, a move that will expand the contribution of locally sourced components for the South Korean smartphone maker’s devices and increase domestic value addition. The company will soon ramp up production to make IT display panels as well.

“Samsung Display Noida Private Ltd. has started production from April. Currently, it is making only mobile display panels at the Noida factory,” a person aware of the matter told ET on condition of anonymity. Samsung Display Noida declined to comment on the development. Analysts said the move would send a positive signal to the entire display ecosystem and help attract smaller ecosystem players to the country.

“The move will give confidence to smaller players in the broader display ecosystem to come to India and set up operations. Samsung is one of the largest players. It gives a signal to the overall supply chain that this component is ready for manufacturing,” said Tarun Pathak, associate director at Counterpoint Research. Pathak said display is going to be more critical for mobile phones, tablets and consumer Internet of Things (CIoT) devices.

“This means that the contribution of local sourcing will increase… Display is a high local value addition product with 15-18% price contribution towards a smartphone cost. Not all will be sourced in India but it is a good starting point,” he said. It needs to be seen at which level Samsung is building the unit and preparing for production since there are certain other components involved, said Pathak. “With the PLI (production-linked incentive) scheme, the local value addition can hit 25-30% over a period of time, from 12-13% presently,” he said. Samsung makes more than 70% of the total display products used across the world in TVs, mobile phones, tablets and watches, among other gadgets, in South Korea, Vietnam and China. Beijing BOE Display Technology, Tainma, LG Display and JDI are some other prominent display makers.

Samsung was the only handset company to have met its targets under the PLI scheme for 2020-21. The other 15 approved companies struggled to meet their targets and have asked the government to relax target deadlines. The Uttar Pradesh government had approved special incentives for Samsung Display Noida, which has invested Rs 4,825 crore to relocate its mobile and IT display production unit from China to the state, giving a boost to India's bid to expand local manufacturing, especially at the cost ..

Besides a financial provisioning of Rs 250 crore from the state government for this project for five years, Samsung will also get financial incentive of Rs 460 crore under the Centre’s Scheme for Promotion of Manufacturing Electronic Components and Semiconductors.