While Taiwanese computer company Asus is set to meet its production targets for this year, under the Indian production-linked scheme for laptops and IT products, Peter Chang, General Manager of the Asia Pacific Systems Business for Asus appears cautious about expanding production too far too soon. “We are still learning about how to produce in India,” Chang told businessline at the sidelines of Computex 2024, a worldwide computer expo that takes place in Taipei, Taiwan.
While popular models for Asus have now started to be made in India, Chang refrained from giving an exact timeline by when Asus’ higher-end gaming laptops or even the latest launched AI-enabled laptops will start to be produced in India. “Selection of which laptops are to be made here is an entirely dynamic process, which is dependent on a multitude of factors including the local ecosystem for components here or the costs of import,” he explained. Similarly, Chang stated that decisions to open newer facilities, including a potentially rumoured collaboration with Dixon, will be entirely dependent on how production in its Chennai facility with Flex pans out in the next few months.
Asus announced its plans to set up a factory in Chennai, in collaboration with Flex in September last year. Chang indicated that production has begun and Asus is on track to complete the first year targets under the IT PLI scheme. “Diversifying production is one of those mega trends. Betting in India makes sense because the market size is big enough to create sizable demand in the future. So making in India will be a win-win situation for us as well as the end user,” Chang said.
Policy certainty
However at the same time, Chang indicated that policy certainty is absolutely necessary in order to sustain demand. Last year in a bid to push production, right after announcing the IT PLI, the government proposed an import ban on laptops, causing panic amongst laptop makers. Later under likely pressure for the US government, the government walked back on the ban, however reacting to the policy environment from last year Chang said, “policy certainty would certainly help us, one more thing the government can do is bring the complete component ecosystem to India.”
Chang also indicated the further help from the government to increase local production would also be welcomed, “So we are at the initial stage of production in India and we are still learning about the local manufacturing process. Sometimes even after we have put in the money, further assistance related to setting up production, importing equipment, setting up electricity and ensuring that production will roll out with good quality control, will all aid in increasing the pace at which we meet our production targets.”
( The writer was recently in Taiwan at the invitation of Asus)