Dell has picked Chennai, the capital city of Tamil Nadu in southern India, as the location for its first PC-manufacturing plant in the country.

It plans to begin manufacturing in India in the first half of next year, with an initial focus on the production of desktop computers, it said on Thursday. Desktops account for about 70 percent of Dell’s business in India.

The computer maker said in January that it would set up a manufacturing facility in India, but hadn’t picked a location at the time.

The plant will serve primarily the domestic market, Chairman Michael Dell said during a visit to India in March. The company will start by assembling products in India, although down the line it may do more extensive manufacturing if a stronger components industry emerges in India, including semiconductors and liquid crystal displays (LCDs), he said.

Dell’s shipments in India increased 82 percent in its most recent quarter, which ended in August, while revenue grew 63 percent. However, the company still trailed behind rivals Hewlett-Packard, Lenovo Group and local vendor HCL Infosystems, according to IDC (India).

Chennai is the home constituency of India’s communications and information technology minister, Dayanidhi Maran. Several big technology companies have set up manufacturing facilities there, including mobile phone makers Nokia and Motorola. Tamil Nadu offers Dell access to a highly skilled workforce and a large base of customers, the company said.

The company has other manufacturing facilities in Asia in Penang, Malaysia, and Xiamen, China. Some of its competitors, such as Lenovo, already have computer assembly operations in India.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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