Asus Still at Learning Stage for Manufacturing in India: Peter Chang

Asus, like several other original equipment manufacturers, has its eyes firmly set on India. The Taiwanese firm has made inroads in the Indian PC market, traditionally dominated by HP, Dell, and Lenovo, and has climbed up to the second spot in the consumer segment in the country. While it is early days for the company here, with its local manufacturing effort in its first year, Asus’ plans for India, which boasts a lucrative and growing personal computer market, remain ambitious.

“Right now, it’s just at the starting point,” said Peter Chang, General Manager for the APAC region at Asus. Chang spoke to Gadgets 360 at the sidelines of Computex Taipei, held between June 4 and June 7, discussing the company’s road ahead in India, its local manufacturing plans, and more.

On the back of the Indian government’s revamped production-linked incentive (PLI) scheme promising an outlay of Rs. 17,000 crore for IT hardware, Asus set up a new manufacturing unit in Chennai last year. It’s only been a few months since the plant went into operation, but Asus aims to ramp up local production in the coming years. Chang said the company was still in the learning stage, and its manufacturing targets in India depended on the results of the first few years.

“We are open, but to set up a clear target also depends on how it goes in the first year and the second year. So, for the first year, I think right now our targets are around 10 percent,” Chang said. “Then, year by year, we will increase. We will go step-by-step to evaluate this. That’s why I say we are still new to it,” he added.

The traditional PC market, comprising desktops, notebooks, and workstations, continues to show potential in India, growing 2.6 percent YoY in the first quarter of 2024, according to data from IDC. The consumer PC segment, where Asus is the second largest player in the country, showed YoY growth (4.4 percent) for the third consecutive quarter. Technology market analyst Canalysis estimates that the commercial and consumer PC market in India will grow at a rate of 14 percent YoY this year. Chang said that the PC market size in India was bigger now but not yet at the scale where it could “sustain the whole ecosystem.”

“For example, with smartphones, (the market) right now in India has already become very mature. The market size is mature enough to sustain the whole ecosystem,” Chang said, adding that the laptop market needed to follow the same trajectory. “Once you are big enough, you have enough scale, then it could be a win-win situation for the industry and the end user.

“I think this is a key criterion for the PC local manufacturer to be successful. So, for Asus, since we have a very ambitious plan for India, it is critical to provide the solution locally to the end user,” Chang said. According to him, Asus’ plans in India hinged on the balance between fulfilling the government’s criteria and its own ambition.

The first part of that, however, is not easy. India’s policy landscape for tech firms and original equipment manufacturers comes with unique hurdles. It can also be unpredictable. Last year in August, in an apparent bid to boost local manufacturing, the government said it would impose licensing requirements on imports of laptops, PCs and tablets. The import restrictions, however, were pushed back after backlash from the PC industry and criticism from the US. They were eventually reversed in October in favour of a new system that could track PC shipments without adversely affecting market supply.

Asus is still learning how to navigate and “manage” such policy challenges in India. “One good thing is that the government already shared the rule with us in advance, so at least we got to know it,” Chang said, speaking about the import restrictions. “It’s still at the initial stage, we are yet to finish the first year. So, we see that to set up local manufacturing, the production facility, electricity, import order, key components and importing all the equipment and then also to mass produce smoothly with good quality control — all these things will change the pace of how fast we can do the investment and fit the (government’s) criteria,” he added.

Disclosure: Asus sponsored the correspondent’s flights and hotel for the event in Taipei.

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