When India launched its $10 billion (₹76,000 crore) incentive scheme in December 2021 to develop semiconductor and display manufacturing capabilities, it was seen as a bold move to not just reduce its dependence on imports but also develop itself as a vital link in the global technology supply chain. Three years down the line, the progress on the semiconductor side of the scheme is apparent with approvals for a semiconductor fabrication (fab) and several packing plants with significant foreign and domestic investments. However, on the display fabrication front — arguably the more visible and consumer-facing component of the initiative — the progress front remains conspicuously absent.

Displays constitute a significant portion of the electronic products. The Ministry of Electronics and IT acknowledged India’s display panel market to be around $7 billion in 2022, expected to grow to $15 billion by 2025. India, despite being one of the world’s largest consumers of electronics, imports nearly 100% of its display panels, a dependency that costs billions in foreign exchange annually. Bharat Kapoor, partner and global managing director of PERLab, the product redesign practice of Kearney says only assembly is carried out locally, with Samsung in Noida, Skyworth & Radiant Tech's joint venture in Hyderabad, and TCL CSOT in Tirupati handling assembly operations.

Beyond the domestic demand, India is increasingly being seen as an assembly hub for electronic devices, and display component’s bill add to a significant cost. For instance, the display component accounts for an estimated 67% of the BOM (Bill of Material) cost for a popular size 55-inch LCD ultra-high definition (UHD) TV, an estimated 20% of the BOM cost of an Apple MacBook Pro and an estimated 24% of the BOM cost of a leading Apple iPhone generation, per Fab Economics.

“Smartphone imports to the US from India increased 321% in 2023 to $4.6 billion, yet there is ample room for this figure to grow as India represented less than 10% of all US smartphone imports. Major global electronics brands are looking to expand in India to diversify away from reliance on China for geopolitical reasons, or as part of a "China + 1" supply strategy,” explains Bob O'Brien, Co-Founder and Principal Analyst at DSCC, A Counterpoint Research Company.

Absence of Indian-made display panels reflects not just a missed financial opportunity but also a deeper strategic challenge in diversifying the global electronics supply chain.

Challenges hindering display fab plans

Within months of launching Semicon India Programme for establishing a robust and sustainable semiconductor and display ecosystem, significant interest emerged in the display manufacturing segment. Two companies – Anil Agarwal led Vedanta and Elest had submitted applications for Display Fabs with the projected investment of $6.7 billion wherein fiscal support from the Central Government was sought for nearly $2.7 billion. These applications included plans for a Gen 8.6 TFT LCD display fab and a 6th-generation AMOLED display fab—technologies critical for advanced smartphones and other high-demand electronics.

However, nearly three years later, no progress has been made on the display side of the scheme, even as the semiconductor segment gains momentum. Rajeev Chandrasekhar, former Minister of State for Electronics and IT, under whose tenure the scheme was launched, attributes this to market dynamics. “From the year 2021-23, there was a glut of display in the world, so the display supply exceeded display demand, questioning the viability of any new display unit. Therefore, there was a reluctance from display manufacturers to come and put up additional capacity in India. The general trend was to shift some capacity from Taiwan or from China to India. And our policy was not encouraging second-hand plants to come and get subsidies because that becomes very difficult to size up for subsidies. That is one of the reasons why the display investments did not materialize.” He adds that as the display industry is almost rebalancing, there are some proposals that are being considered already and some display manufacturing companies may be interested in investing or co-investing in India going forward.

Other factors have also impeded progress. Danish Faruqui, CEO of Fab Economics points that as per the Government of India policy, the type of eligible for subsidy Display Fab in India is restricted to Gen 8 or above for TFT LCD and Gen 6 or above of AMOLED with HVM capacity requirement of 60,000 and 30,000 panel per month – which further narrows down the investment options to a spectrum, which is highly constrained due to geopolitics dynamics and global competition in the display segment.

Kapoor elaborates, “From a cost perspective, establishing a display fab plant costs between $3-5 billion, depending on technology and capacity. Display raw materials are controlled by a few players, such as Corning for Mother Glass, LG Chem for Liquid Crystal, and UDC and Mattrix Technologies for OLED materials.”

Echoing this, Avneet Singh Marwah, CEO, Super Plastronics Pvt Ltd, a Kodak brand Licensee, explains “Display fabs are more advanced and require higher capital investment, along with specialized infrastructure and materials that are not readily available in India. There is a lack of specialized skills required for advanced display fab technologies.”

Asia’s dominance & India’s absence

The world’s appetite for display’s that are being used in smartphones, televisions, laptops, and electric vehicle dashboards has been surging, putting the global display market at about $150 billion in 2023, continuing to expand and projected to grow to $295.04 billion by 2032, at a CAGR of 8.3% during the forecast period. Yet, the global display industry is tightly controlled by a few dominant players clustered in Asia, with China, Japan and South Korea accounting for the lion’s share of global production.

One of the reasons for this industry to be concentrated in Asia is that unlike Semiconductor technology or electronics manufacturing that primarily originates from product OEMs and equipment manufacturers, and concentrated by contract manufacturing, display technology is purely driven by display manufacturers.

“Tata and Adani are the primary major investors in semiconductor fab, forming partnerships with global firms such as PSMC and Tower Semiconductors. In contrast, display technology is purely driven by display manufacturers, which limits the partnership opportunity,” explains Kapoor.

For instance, South Korean giants Samsung Display and LG Display had been leading the market in the advanced display technologies such as OLED (organic light-emitting diode)

segment. But Chinese firms, such as BOE Technology and CSOT (China Star Optoelectronics Technology), have made rapid strides. Japan and Taiwan remain smaller but steady players, with companies like Japan Display Inc. and AU Optronics catering to niche segments.

“In 2013, China had just 1% global market share in the LCD Display segment and now a decade later in 2024, it dominates the world’s market with 72% global market share. Similarly in the OLED segment, China had 2.7% global market share in 2015, and now a decade later in 2024 it dominates the world’s market with 53% global market share. Chinese display manufacturers heavyweights are BOE, TCL, Tianma, and Visionox while Japan’s Sharp, JOLED and South Korea’s LG and Samsung Display are now trailing in both production capacities and technology leadership,” adds Faruqui of Fab Economics. He adds, China’s display segment policy at state and province level has been instrumental in the success of China’s Display industry.

Time to Act

Nations like the US, Japan, and South Korea are struggling to compete with China in the display segment, with many players being forced to exit business verticals and abandon greenfield projects. Therefore, India needs a display sector policy strategically informed by the success factors of competing regions, alongside geopolitical dynamics. Similarly, corporate players in India attempting to enter the display segment require a competition-informed approach to technology selection, planning, execution, and a long-term strategic roadmap to avoid being outpaced by China. For instance, India’s Vedanta has partnered with Taiwan-based Innolux as its technology partner for TFT-LCD panels. Additionally, in May this year, Vedanta acquired a Japanese manufacturer of Gen 4 to Gen 8 TFT LCD glass substrates and plans to invest around $500 million in the company. Emails sent to Vedanta did not elicit any response at the time of publication.

As India intends to venture into yet another unknown territory, experts weigh in on how India can succeed. There is an opportunity for India to be the China+1 market for LCD as Korean leaders have moved away from LCD. “China dominates the flat panel display market, controlling 75% of global capacity and a complete supply chain. Comparatively, India, lacking production facilities and suppliers, is starting from scratch. To build a display supply chain, India could focus on a-Si LCD fabs for TV, IT, and automotive panels—mature, high-yield technology. While OLED is gaining popularity, it will remain a small part of the market for these large display segments for years. However, India’s display industry would also need protection from global market pressures, like China’s state-subsidized dominance, to thrive,” says O'Brien of Counterpoint Research.

Chandrasekhar adds the biggest consumer of display is consumer equipment, like TVs, computer monitors, and mobile devices. So the technology for display will be determined by the market for display, which is the mobile devices and the compute devices. In those investments that come to India and feed the electronics industry, and also export from India, using India's electronics industry as a base customer.