Samsung sets eyes on AI transformation in India, to participate in PLI for component manufacturing

Gurgaon, Dec 23 (PTI) Leading appliances and consumer electronics maker Samsung is investing in the Artificial Intelligence (AI) ecosystem in the country, besides participating in the PLI scheme for display modules, its President and CEO of Southwest Asia, JB Park, said on Tuesday.

Samsung, which has completed three decades of operations in India, sees "tremendous" potential here and expects India to become among its leading global markets, supported by tailwinds, the rise of the economy and per capita GDP in the coming years.

The company, part of South Korean Chaebol Samsung, is looking at "huge potential" here with a comparatively lower penetration of appliances and betting on the "future opportunities" of transforming the mass market to premium, a trend which has already started in mobile phones, said Park.

Moreover, Samsung India also ruled out listing on local stock exchanges like the other Korean sister concerns such as Hyundai Motors India and LG Electronics India.

"No, we do not have any such plans as of now," Park told PTI.

Park also ruled out any such plans in future by Samsung to list its Indian entity at the Indian stock exchanges and said: "There are multiple options (for getting money to invest), but IPO is not in the plan." On the production-linked incentive (PLI) schemes, Park said Samsung is participating in the Electronics Manufacturing Component Scheme. It has applied for investments for display under the government ECMS programme.

When asked about the PLI scheme, Park thanked the Indian government "for giving this kind of policy to enable more production in India, making the company's Made in India products more competitive".

"We are learning from adopting how the policies are being made," he said, adding, "I think the PLI 2.0, if they (government) make it more competitive against nations that are deriving more manufacturing investment to their country. It's a necessity that we continue to work together with the government on a PLI platform." Samsung India, which participated in the smartphone PLI scheme, has completed it, though it missed the target during the COVID times.

Park lauded the role of MeitY (Ministry of Electronics and Information Technology) and said it "was very supportive of Samsung on making the mobile PLI especially a success story".

Samsung, which has completed three decades in India and has set up two manufaturing unit and three R&D centres, which are contributing to its global market is now taking a next leap by investing in AI (Artificial Intelligence) transformation.

"The next 30 years will be an investment in AI transformation. We will heavily shift our engineering capacity focus towards AI development. And I think India is rich and has a very talented resource pool that will contribute to that segment on investment," said Park.

Samsung India's R&D centres, Bengaluru (SRI-B) and Noida (SRI-N) are crucial global hubs, focusing on mobile software, AI, IoT, and wireless tech (2G to 5G), driving innovation for flagship devices and localised features, making India the second-largest R&D base after Korea.

When asked about future investments, which Samsung is making in AI here, Park said: "We are moving from coding and software engineering to AI-focused engineering." In the last three decades, Samsung's total sales in India have crossed Rs 1 lakh crore (around USD 12 billion), a feat which no other company operating in the appliance and consumer electronic verticle in India has been able to achieve so far.

According to Park, "India market will be comparable to the US, European market and China once the GDP goes up” and crosses USD 5 trillion.

However, Park also added that India's contribution to Samsung's present global fold is "in the low" digits because the average selling price (ASP) is lower than in other markets such as the US and Europe.

This provides the company with an opportunity to grow here with the trend of premiumisation.

"That's why we are transforming the portfolio into premium, including mobile phones and consumer electronics. This is where we need to migrate as we are bringing all the vision AI, Bespoke AI, and Galaxy AI into an AI lifestyle platform, which needs connectivity and needs to talk to each other," he said.

Currently, Samsung gets 70 per cent of its revenue from mobile phones and the rest from appliances and other segments. Park expects contributions from appliances and other categories to Samsung India's total sales to increase in the coming years and account for half of the revenue "in the next 10 years". PTI KRH ANZ KRH MR