Domestic Mobile Phone Manufacturing Should Be Strategically Supported for Türkiye’s Technological Future
Smartphones are no longer merely consumer electronics products that enable communication. Today, the smartphone is one of the most important high-technology platforms at the intersection of telecommunications technologies, semiconductors, software, artificial intelligence, cybersecurity, imaging technologies, mobile applications, and digital services. For this reason, it is not sufficient for Türkiye to view the mobile phone industry solely from the perspective of imports, sales, and consumption.
The fundamental question facing Türkiye is this: Will we remain a large market in which millions of mobile phones are consumed, or will we become a country that transforms the economic power generated by this market into manufacturing, engineering, R&D, technology, and exports? As TUYAD, we believe that our choice should be clear. Türkiye should not be a country that merely uses and imports technology products; it should be a country that develops, manufactures, and exports them.
Domestic Mobile Phone Manufacturing Is a Matter of Industrial Policy
Supporting mobile phone manufacturing in Türkiye should not be regarded simply as protecting certain manufacturers or brands.What must ultimately be protected and developed is Türkiye’s technological manufacturing capability. Manufacturing a mobile phone in Türkiye can directly or indirectly stimulate a wide range of activities beyond the assembly line itself, including electronics manufacturing, PCB assembly technologies, testing and quality systems, plastic and mechanical components, power electronics, charging equipment, antenna technologies, software, device optimization, logistics, packaging, after-sales services, and engineering.
Production that begins today with a certain level of domestic content can, if supported by the right industrial policies, gradually lead to greater use of locally sourced components, more engineering activities being carried out in Türkiye, the emergence of new suppliers, and ultimately the development of products designed and engineered in Türkiye. However, for this to happen, the industry requires continuity and long-term stability. A technology ecosystem cannot be built in a country within just a few years. Companies need long-term and predictable market conditions in order to invest in factories, machinery, human capital, R&D, and supply chains. For this reason, leaving companies that invest in Türkiye, establish manufacturing facilities, create employment, and develop technology to compete solely on price with imported products does not constitute a sound industrial policy.
The Government Should Effectively Utilize Existing Investment Incentives to Support the Development of Domestic Mobile Phone Manufacturing
Türkiye already has a strong investment incentive framework.Under the existing investment incentive system, depending on the characteristics of the project and the applicable program, support measures may include customs duty exemptions, VAT exemptions, tax reductions, interest or profit-share support, machinery support, and investment site allocation. Under regional incentive schemes, employer social security premium contribution support may also be available. Investments in strategic technology fields such as mobile phones and telecommunications electronics should be enabled to benefit from these support mechanisms as effectively as possible, provided thatthey meet the requirements of the applicable legislation.
The objective does not necessarily need to be the establishment of an entirely new or privileged incentive regime. Türkiye should use the incentive instruments already available to the government in a more effective and coordinated manner, in line with the objectives of domestic technology production and localization. In particular, strong investment incentives for new production lines, automation systems, testing equipment, and advanced manufacturing technologies are essential for manufacturers in Türkiye to remain competitive against their international counterparts.
R&D and Engineering Support Should Be Placed at the Core of Manufacturing
Türkiye’s objective should not be limited to assembling mobile phones within the country. The real objective should be to strengthen Türkiye’s capabilities in product development, software, electronic design, device optimization, telecommunications technologies, artificial intelligence applications, cybersecurity, and product engineering. For this reason, companies manufacturing mobile phones in Türkiye should be enabled to make more effective use of R&D and Design Center incentives, TÜBİTAK’s industrial R&D and innovation programs for eligible projects, and university-industry cooperation mechanisms. Türkiye’s R&D incentive framework includes mechanisms such as deductions for R&D expenditures, tax and social security contribution advantages associated with the employment of qualified personnel, stamp duty exemptions, and customs exemptions for certain R&D-related activities.TÜBİTAK also operates various support programs for research, technology development, and innovation projects undertaken by industrial enterprises. Within the mobile phone industry, these support mechanisms should be used effectively for projects focusing particularly on software, artificial intelligence, telecommunications, device security, energy efficiency, electronic design, and next-generation mobile technologies.
The Incentive System Should Reward Higher Levels of Domestic Content
The ultimate objective of supporting domestic manufacturing should not be limited to performing the final assembly of a product in Türkiye. The support system should be designed progressively so as to increase the value added generated in Türkiye over time. Manufacturers should be eligible for additional incentives when they use more locally sourced components, employ more engineers in Türkiye, conduct R&D activities, develop domestic suppliers, and export products from Türkiye. In this way, a direct relationship can be established between the incentives provided by the public sector and the localization achieved by industry. For example, the integration of domestic suppliers into areas such as PCB manufacturing and assembly, mechanical components, power electronics, charging equipment, testing and calibration services, software development, packaging, and other supporting industries can be encouraged. Over time, this approach would support not only mobile phone factories themselves but also the growth of the domestic technology supply chain developing around them.
Qualified Employment Should Also Be Supported
Human capital is one of the most critical inputs of the technology industry. It is of great importance that electronics engineers, telecommunications engineers, software developers, artificial intelligence specialists, industrial engineers, test engineers, technicians, and manufacturing personnel are trained and developed within this ecosystem in Türkiye. Existing employment incentives should therefore be used effectively to support the qualified employment created by domestic mobile phone manufacturers, while direct programs should be established between manufacturers, universities, vocational colleges, and vocational education institutions. With the right policies, Türkiye’s young population can become one of its strongest competitive advantages in this field.
Access to Finance Should Be Facilitated
Technology manufacturing requires substantial working capital and continuous investment. Manufacturers must finance machinery and production facilities while at the same time funding components, inventories, R&D activities, and human resources. For this reason, financial instruments such as interest or profit-share support available under the investment incentive system should be effectively utilized for qualifying technology investments. Such financial support instruments are already included within the existing incentive framework. In addition, consideration should be given to strengthening technology manufacturers’ access to long-term investment financing through public banks, development finance institutions, and appropriate public support mechanisms.
Exports of Mobile Phones Manufactured in Türkiye Should Also Be Encouraged
Türkiye’s objective should not be limited to supplying the domestic market through local production. Türkiye’s geographical location offers a significant advantage in terms of access to markets in Europe, the Middle East, the Balkans, the Caucasus, Central Asia, and Africa. Once an appropriate scale of production is achieved, Türkiye has the potential to become a regional manufacturing hub for mobile phones and consumer electronics.For this reason, public policy should also support the export of devices manufactured in Türkiye, their international branding, access to overseas distribution channels, and promotion in global markets. The scale provided by the domestic market should be regarded as a foundation for expanding into export markets.
Strong and Effective Import Surveillance Should Be Applied to B-Segment Mobile Phones
Import policy is one of the most critical issues for the sustainability of domestic manufacturing. Particularly in the B-segment smartphone category, which addresses a large portion of the market and is characterized by intense price competition, domestic production in Türkiye should be protected against excessively low import prices. For this reason, we believe that a strong and effective import surveillance mechanism should be applied to B-segment mobile phone imports, and that the applicable surveillance values should be reviewed regularly in line with developments in the market and the industry. The Ministry of Trade already uses import surveillance measures as one of its trade policy instruments for monitoring import trends in products that are also manufactured domestically. In 2026, surveillance values for various product groups were updated and new surveillance measures were introduced.
A similar policy approach should also be applied to the mobile phone sector, while taking into account Türkiye’s international obligations and consumer interests. The objective is not to prohibit imports. The objective is to prevent manufacturers that establish factories in Türkiye, invest, create employment, pay taxes, conduct R&D activities, and seek to develop domestic supply chains from abandoning production under unsustainable price pressure. A reasonable and predictable policy balance should be established in favor of manufacturing between companies that produce in Türkiye and those that merely import finished products and place them on the domestic market.
Incentive and Protection Policies Should Be Implemented Together
Import surveillance alone is not sufficient. Likewise, incentives alone will not be enough. A successful technology industry policy requires an integrated framework that both encourages production and creates market conditions under which production can remain sustainable. On the one hand, investment, R&D, financing, employment, and export support mechanisms should be available. On the other hand, trade policy instruments should be used to protect domestic manufacturing against excessively low-priced imports. In return for these measures, manufacturers should also be expected to deliver higher levels of domestic content, greater investment in advanced technologies, more engineering activities, increased employment, and stronger export performance.
Türkiye Should Use Its Domestic Market to Build Technological Manufacturing Capacity
Türkiye has a large and dynamic mobile phone market. A market of this scale should not be regarded merely as a marketplace for devices manufactured in different parts of the world. This demand represents an important strategic advantage for Türkiye’s industrial policy. Many of the world’s leading technology-producing countries have used the scale provided by their domestic markets to develop and expand their own manufacturing capabilities. Türkiye should do the same. The cost of losing the mobile phone factories and manufacturing capabilities that exist in Türkiye today would be significantly greater than the cost of rebuilding the same capacity in the future. For this reason, preserving existing manufacturing facilities, increasing capacity utilization rates, encouraging new investments, and expanding the domestic supply chain should be regarded as strategic priorities.
As TUYAD, we believe that mobile phone and telecommunications electronics manufacturing in Türkiye should be treated as a strategic sector; existing investment incentives should be effectively made available to qualifying investments in this field; R&D, design, software, and engineering activities should receive stronger support; companies that increase their domestic content levels should be eligible for additional incentives; special emphasis should be placed on qualified employment and the development of the domestic supply chain; manufacturers’ access to investment and working capital financing should be facilitated; exports of devices manufactured in Türkiye should be supported; and, in particular, strong and effective import surveillance mechanisms should be applied to B-segment mobile phone imports in order to protect domestic manufacturing.
Mobile phone manufacturing is not an end in itself; rather, it is an important starting point for expanding Türkiye’s electronics, telecommunications, software, and high-technology industries.
To achieve this, we must protect domestic manufacturing, support those who invest in Türkiye, and transform the strength of our domestic market into Türkiye’s technological future.
TUYAD
Telecommunication Satellite and Electronic Industrialists Business People Association
