Domestic contract manufacturer Dixon Technologies on Monday announced the setting up of a $3 billion (`25,860 crore) display fabrication facility in the country to strengthen its foray into the electronics components industry.
The company is currently in active discussions with a global technology company to establish the same and is awaiting guidelines from the government on the India Semiconductor Mission (ISM) 2.0, Dixon vice chairman and managing director Atul Lall said in the earnings call with analysts.
“This move aims to localise production, enhance supply chain control, and achieve cost efficiencies,” Lall said, adding that India currently imports display chip components and Dixon’s foray will enhance value addition.
“The earlier ISM guidelines offered a 50% capital subsidy from the central government and 20% from state governments. It’s an extremely attractive proposition, and we are awaiting further clarity on ISM 2.0 to move forward,” Lall said.
Dixon’s display fab will cater to its existing customers across mobile, television and notebook segments, and other customers. Lall said it is a high Ebitda margin business for the company.
“The electronics manufacturing industry in India has reached a level of maturity in terms of device and product manufacturing. To sustain and grow further, a strong component ecosystem is essential,” Lall said.
On Monday, Dixon reported a consolidated net profit of `217 crore for the October-December quarter, up 124% y-o-y. The company’s revenue from operations rose 117% to `10,461 crore.
Its revenue from the mobile business rose 190% y-o-y to `9,305 crore during the quarter. The business contributes 89% to the revenue.
The company is also awaiting the components incentive scheme to foray into non-semiconductor components. Dixon said its display module unit will become operational in the next two to three quarters.
The company will soon commence mass production of laptops for HP and Asus. It has already started production of Lenovo and Acer. Financial Express