Dixon Technologies is confident of securing key government approvals under India’s Press Note 3 (PN3) regime for its joint ventures with Chinese electronics and component manufacturers, including Longcheer, HKC, Chongqing Yuhai Precision Manufacturing, and Vivo Mobile India, in the coming months. This comes as the company ramps up efforts to expand its component manufacturing capabilities and build a resilient, vertically integrated supply chain.
The Noida-based electronics manufacturer also plans to file fresh applications next week under the Electronics Components Manufacturing Scheme (ECMS) for display modules, camera modules, and precision components.
Additionally, Dixon is in advanced discussions for a new joint venture to manufacture a critical component for telecom devices, a segment it sees as a multi-year growth driver with revenue potential of nearly Rs 5,000 crore.
“We are making strategic investments to expand capacities and deepen the component ecosystem. These are critical for securing our long-term business in a post-PLI environment,” said Atul Lall, Managing Director of Dixon Technologies, during the company’s post-Q1 earnings call.
Three key PN3-linked JVs await government nod
At the top of Dixon’s PN3 clearance list is its joint venture with Longcheer, a leading global original design manufacturer (ODM) for mobile and IoT devices. Dixon holds a 74 percent stake in the JV.
“Our information is that we’ll get PN3 approval very shortly,” Lall said. “Longcheer is a large outsourcing partner for global brands, not just Chinese ones. The partnership is helping us expand our product portfolio and will also include a joint design center.”
The second JV, with display major HKC, aims to set up a display module facility with an initial monthly capacity of 2 million units, expandable to 4 million. The facility will also manufacture 1.8 million notebook displays and automotive displays, with future plans to add TV display modules.
The $130 million project includes a 400,000 sq. ft. factory, currently under construction, which is expected to be partially handed over in the next 45 days. While PN3 approval is pending, Dixon clarified that project execution is continuing in parallel.
“We’re actively pursuing PN3 clearance and expect it within a couple of months,” Lall said.
A third application, for Dixon’s planned 51 percent stake in Vivo’s Indian manufacturing arm, is also under evaluation, with approval expected in the next few days.
"We feel that we should be getting it again in the next few days and post that the consolidation will start happening," Lall said.
On July 15, Dixon announced it would acquire 51 percent of QTech India, which manufactures and supplies camera and fingerprint modules for mobile handsets, IoT devices, and automotive systems. It also signed a new JV agreement with Chongqing Yuhai Precision Manufacturing Co. Ltd to produce precision components for laptops, mobile phones, and automotive products in India.
Lall noted that Dixon plans to file a PN3 application for the Chongqing Yuhai JV within the next 30 to 45 days. However, the QTech acquisition will not require PN3 clearance, as the unit was operational before the policy came into effect.
“QTech’s India facility already supplies major Android brands like Vivo, Oppo, Xiaomi, and Motorola. Last year, they produced around 40 million camera modules,” Lall said. “Our in-house consumption alone is expected to reach 180–190 million modules in the next two years. We’re ramping up to meet that level.”
He added that the camera module business alone is expected to reach ₹5,000 crore in annual revenue over the next four to five years.
Inventec JV and aggressive Capex push
In May, Dixon entered a joint venture with Taiwanese IT hardware giant Inventec Corporation to manufacture personal computers, components, and servers in India. Production is expected to begin in Q4 of the current fiscal year.
“Inventec is one of the world’s top five ODMs in IT. They’re also supporting us with backward integration,” Lall said. “Our JV partner Chongqing Yuhai is a key supplier to Inventec and HP. We are also exploring possibilities in SSDs and memory modules through this partnership.”
On capital expenditure, Dixon plans to invest Rs 750–Rs 800 crore this fiscal to build its camera and display module facilities, with an additional Rs 400 crore allocated for capacity expansion across other product lines. In Q1 alone, it has invested around Rs 287 crore in capex.
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