NEW DELHI: Homegrown contract electronics maker Dixon Technologies is in discussions with a global technology company to set-up a display fabrication (fab) unit in the country entailing an investment of nearly $3-billion.

The Noida-based firm is also in final discussions with a large global original design manufacturer (ODM) to establish a joint venture (JV) for expanding into high-end product categories such as notebooks, servers, and IT products.

“We are in active discussion with a global technology partner for setting up a world-class display fab. Currently, India relies heavily on the import of displays. A foray into the segment will aim to localise production and bring greater control over the supply chain and cost efficiencies,” Atul Lall, Managing Director of Dixon Technologies said at the company’s Q3FY25 post-earnings call with analysts Monday.

“We are awaiting the rollout of policy guidelines under ISM 2.0 by the government of India to take this project forward. This will significantly enhance our value addition," he added.

The capital expenditure (capex) for a display fab is $3 billion, a large part of which will be subsidised by the government through the India Semiconductor Mission (ISM) 2.0 scheme.

“A large part of that capex should be subsidised by the government. Our share of capex contribution should be lower, but the overall capex requirement for a display tab is around $3 billion,” Lall said.

Under the earlier ISM guidelines, the Central government offered 50% capital subsidy on a pari-passu (equal footing) basis, while certain state governments offered 20% on a pari-passu basis. “It is an extremely attractive project with hugely margin accretive and a very fast payback period,” the top executive said.

Dixon expects to start the manufacturing of displays with Hong Kong-based HKC in the Q1-Q2 of the next fiscal year, Lall said. “We are also looking to deepen manufacturing and looking into partnerships for precision components, mechanicals, camera modules and battery packs.”

Dixon’s dedicated IT hardware and manufacturing unit in China is expected to commence trial production in February 2025, with mass production set to begin in Q1 of fiscal 2025-26 for HP and Asus. “Mass production for Lenovo has already started, along with Acer,” Lall said.

The Dixon MD said the company’s subsidiary Ismartu has acquired land, building, plant, and machinery for Rs 133 crore to scale up the production of Nothing smartphones, and Transsion brands such as Infinix, Tecno, and iTel.

“We are targeting to export almost 3 million phones. It is going to (eventually) generate a revenue of almost Rs 1,500 to 1,800 crores for us. Exports start from next month onwards. So we need to add capacity to the existing Ismartu capacity,” he said.

“We expect to export around 0.5 to 0.6 million units in February to March of this fiscal. For Motorola, we have been consistently clocking a volume of more than 1 million units per month, and the order book looks safe for the coming months, including some decent export orders. We have been witnessing a consistent increase in volumes of Xiaomi, and expect this momentum to continue in the coming quarters. We also have a decent order book for Oppo,” Lall said.

Dixon has successfully dispatched the first order production for a large global brand through Compal in December 2024, and the order book for the coming months looks “very promising”, he stated.

Dixon’s revenues in the mobile and EMS division nearly trebled – from Rs 3,214 crores in Q3FY24 to Rs 9,305 crores in Q3FY25 – growing at 190% year-on-year. This included revenue from hearables and wearables (Rs 129 crore), telecom (Rs 977 crore), and Ismartu (Rs 1,833 crore).