Product (Million units)TM Volumes TDM Volumes for Local Sales (Million units) TDM Volumes for Exports (Million units)
2010 200 154.55 NA 2011 220 220.00 NA 2012 242 170.00 NA 2013 267.9 242.00 NA 2014 294.7 187.00 NA 2015 324.2 267.89 NA
Base Year: 2011 Source: IESA-Frost & Sullivan
Industry SWOT
The power supplies value chain comprises of various material and component suppliers, subsystem suppliers and the downstream segments like IT, ITeS, etc. The Indian market witnesses a huge unorganized market for power supplies comprising a number of small local players who execute local assembly activities. The electronic components are imported while the rest of the components are locally sourced and assembled. This contributes to high value addition in the indigenous manufacturing of power supplies. India meets around 70 per cent of the local demand through local manufacturing. The remaining 30 per cent is imported majorly as finished goods and either sold at lower prices since they do not undergo safety certifications or tested locally and sold at a higher price.
The power supplies value chain is depicted in the figure below.
Component and Sub-system Suppliers Transformer Copper wires Power supply IC Power Supplies - OEM Power Supplies - EMS Consumer IT / ITes Mosfets Rectifiers Capacitor Mechanical Components Rubber Plastic, Sheet Metal Assemblers Downstream
VMC is one of the top players and holds patents for its designs. There are numerous small players carrying out their own design and assembly catering to particular end user segments. Manufacturing and local assembly are the country’s greatest strengths with high quality labour availability and cheaper labour costs when compared to China or other neighbouring countries.
The table below captures the capability in India across the power supplies value chain.
Category Product Local Supply ManufacturingLocal CapabilityLocal IP Company Names Level of Local Value Add Remarks
Components and Sub systems
Capacitors Offices; Total Only Sales Imports
No No Koshin, STM,
Infineon NA
Though design capability exists there is no local realization of IP,
Lack of infrastructure Transformer Majorly local supply, partially imported Yes No Pulse magnetic, Many local players NA Rectifier diodes Partially Imported, Partial local supply
Yes No Many small
players High
PCB Local supply Yes No
AT&S, Derg electronics, Many
local players, EMS High Mosfets/
Switching devices
Local supply Yes No Many local players
Power supplies
OEM Yes Yes, High value add No VMC, many local players High
EMS Yes Yes, High value add No Delta Electronics, many small
players High
The challenge that the industry is currently facing is the component customs duty which is around 12.36 to 16.85 per cent. Mechanical components are locally sourced though. Although huge opportunities lie ahead, especially with the booming IT and ITeS sector, local manufacturing largely caters only to local demand. There are very minimal exports with respect to this product. Lack of scalable manufacturing capacity deprives the ecosystem of export opportunities.
The SWOT chart below captures the analysis for the power supplies market.
STRENGTHS
Availability of high quality labour
Availability of mechanical components at par with China/ Taiwan in terms of price and quality
Labour costs are cheaper in India when compared to China
Huge consumption demand
Well laid EMS industry –outsourcing assembly and PCB manufacturing
OPPORTUNITIES
Consistent end user growth in terms of laptops, Smartphones, LED lighting etc
Escalating manufacturing and labour costs in China driving manufacturers to invest in facilities in India India as a export hub for servicing ME, North Africa and Europe countries
Increasing demand for high voltage power supplies in the IT/ ITes sector
WEAKNESS
Reliance on imports for some of the critical components - IC, electrolytic capacitors
Identifying right suppliers for component imports Limited product design activities locally; Limited IP generation
THREATS
Many Chinese imports are sold in the local market without any testing
Emergence of other low cost manufacturing destinations like Vietnam
Well established manufacturing ecosystem in neighbouring China
Component SWOT
The top 4 components that contribute to majority of the power supplies bill of materials (BoM) are: 1. Transformer
2. Power semiconductor 3. Rectifier diodes 4. PCB
The transformer, the most expensive component in an external adapter, is majorly sourced locally with a number of local players offering the same. Local transformer manufacturers are largely dependent on imported copper. The presence of large manufacturing capacities in China, Hong Kong, Taiwan etc.,make it more attractive for manufacturers to import transformers than source them locally. The ICs, capacitors, rectifiers and MOSFETs are also predominantly imported. The PCBs, mechanical components, plastic, sheet metal, rubber etc., are locally sourced and are available at competitive prices and reputable quality.
Strategic Conclusions
General
The component duty currently ranges between 12.36 to 16.85 per cent, which is considered high for the industry especially since India is a price sensitive market. Offering subsidies for indigenous manufacturers through capital subsidies and preferential excise duties would prove to be very beneficial since the ecosystem possesses considerable competencies already.
IP development
Around 30 per cent of the power supplies are imported as finished goods, of which around 15 per cent of them are sold in the local market without safety certifications and testing. This necessitates the need for a policy initiative to prevent dumping of power supplies which would bolster the quality of power supplies available in the Indian market. Regional level testing labs should be established and testing for imported goods should be mandated. The proliferation of unbranded products in the market calls for CVD to be levied to prevent dumping in the local market.
Component ecosystem
Lack of volume capacities forces some manufacturers to import transformers from the neighbouring countries. The Indian Government could aid in ensuring continual availability of copper through the year at subsidized prices. This will reduce the overall cost of the components, thus making it price competitive.