Samsung Electronics Co. has decided to spend 40 billion rupees ($621 million) to double its smartphone output in India to bet on the fastest growing smartphone market to make up for sagging presence in China.

The South Korean tech giant said Sunday that it would expand its smartphone manufacturing facilities that also churn out refrigerators in Noida, southeast of New Delhi, to 240,000 square meters from current 120,000 square meters by injecting 40 billion rupees. The groundbreaking is slated for Wednesday.

Once the factory addition is completed, it is expected to produce 10 million units of smartphone and 200,000 units of refrigerator per month, up from current monthly output of 5 million and 100,000 units, respectively.

The company’s decision to double its smartphone output capacity in India comes after the country has seen a remarkable growth in smartphone use. Although India has come late in marketing smartphones, the country’s smartphone market has been growing rapidly mainly led by strong demand for budget smartphones.

Samsung Electronics has stayed atop in the Indian smartphone market for years and its market share for the January-March period this year reached 22 percent, thanks to its budget smartphone model Galaxy J series.

The world’s largest smartphone seller is determined to defend its leadership in the market against Chinese rivals.

In September last year, Jay Y. Lee, Samsung Electronics vice chairman and de facto leader of Samsung Group, visited India and met with India’s Prime Minister Narendra Modi to discuss cooperative measures. The company recently promoted the head of its India office Hong Hyun-chil to senior executive vice president position from senior managing director.

Industry watchers forecast the Indian smartphone market has more room to grow. While India’s population tops 1.3 billion, smartphone sales in the country stayed below 200 million units last year. China, also with similar population level, sold more than 500 million units during the same period.

Samsung Electronics signed a memorandum of understanding with India’s state government Uttar Pradesh on Noida factory expansion in October last year.

Shares of Samsung Electronics finished Monday at 2,297,000 won ($2,054), down 1,000 won or 0.04 percent from the previous session.

By Seo Dong-cheol

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