Dixon To Foray Into Electronics Component Manufacturing Space

Homegrown electronics manufacturer Dixon Technologies is reportedly entering the country’s electronics component manufacturing space (ECMS) initially for captive requirements before expanding to exports.

Dixon’s CEO Atul Lal told PTI that electronics component is the next phase of growth for the company.

Dixon has reportedly started working on a project for display modules and is now looking at manufacturing components like camera modules, mechanical enclosures and lithium ion batteries. 

“We have already rolled out a project for display modules. We are evaluating various other component categories like camera modules, mechanical enclosures and also lithium ion batteries. So we are seriously evaluating and we will be deeply participating in ECMS,” Lal said.

Lal further said that initially the components will be produced for captive usage and will be expanded later to cater to external market requirements.

The report added that Tata Electronics is also looking to invest INR 2,000 Cr for electronics components manufacturing under the INR 23,000 Cr incentive scheme launched by the Centre.

The development comes a few days after Union Minister Ashwini Vaishnaw said that the guidelines for electronics components scheme have been finalised and its online portal will be launched soon. 

The scheme is expected to boost domestic production, create jobs and reduce import dependency, said Vaishnaw. 

Last month, the Union Cabinet approved a production-linked incentive (PLI) scheme for non-semiconductor electronics components with an outlay of INR 22,919 Cr.

Vaishnaw a couple of days back, also said that electronics component manufacturers will need to establish in-house design teams and achieve Six Sigma quality standards to benefit from the government’s ECMS. 

Taking note of the requirement, Lall said that Dixon welcomes the directive for Six Sigma level and setting up design teams and would discuss the same within the team.

Dixon Powering Manufacturing Capabilities In Smartphones And PCs

In the electronics manufacturing space, Dixon in the last few months have joined hands with smartphone and laptop companies like Vivo and HP. 

It inked a pact with Vivo India to launch an original equipment manufacturer (OEM) facility via a joint venture. Dixon will hold 51% stake in the JV while the remaining 49% will be held by Vivo India.

In September last year, Dixon Technologies’ wholly-owned subsidiary Padget Electronics signed a pact with Asus to manufacture notebooks for the Taiwanese tech major under the production-linked incentive 2.0 scheme.

Dixon also signed a memorandum of understanding (MoU) with the Tamil Nadu government to set up a manufacturing facility near Chennai with a total investment of INR 1,000 Cr.  The proposed unit is expected to create employment opportunities for 5,000 people in the state.

Besides, the Noida-based listed company also assembles smartphones for Google, Xiaomi, Oppo and others. 

It is pertinent to note that Dixon is in discussions to set up a $3 Bn display fabrication facility in India. The announcement was made by Lall during the company’s Q3 earnings call held in January. 

Back then, Lall said that around $3 Bn will be infused in the project initially with 60% allocation to televisions and 15%-12% allocation to mobile phone manufacturing. Further, the company is looking to take government subsidies to fuel this project. 

On the financial front, Dixon Technologies India’s consolidated profit after tax (PAT) zoomed 47% to INR 375 Cr in FY24 from INR 255 Cr in the previous fiscal year. Revenue from operations surged 45% to INR 17,691 Cr during the year under review from INR 12,192 Cr in FY23. 

Reuters in February reported that Dixon is on track to more than double its revenue in the fiscal year 2024-25 (FY25).