Dixon in talks to set up $3 billion display fab in India; awaiting ISM 2.0 guidelines

Atul Lall, Dixon

Dixon Technologies is in active discussions with a global technology company to establish a display fabrication facility (fab) worth $3 billion in India, marking a significant step toward becoming a key player in the electronics component industry.

The company is also in the final stages of negotiations for a joint venture with a leading Original Design Manufacturer (ODM), which is a major supplier of notebooks and servers to global brands.

“We are in active discussions with a global technology partner to set up a world-class display fab, a critical component for mobiles, IT hardware, and consumer electronics. This move aims to localize production, enhance supply chain control, and achieve cost efficiencies,” said Atul Lall, Managing Director of Dixon Technologies, during the Q3 earnings call on January 20.

The proposed display fab is expected to significantly enhance Dixon’s value addition capabilities. “This is a complex project, and we are in talks with our partners. It represents a big step for Dixon,” Lall added.

The total capex requirement for the display fab is around $3 billion. A large part of the capex will be subsidized by the government under the ISM 2.0, he said.

The company is awaiting policy guidelines under the Indian Semiconductor Mission (ISM) 2.0 from the Government of India to proceed with the project.

“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 explained.

The display fab will cater to Dixon’s existing customers across mobile, television, and notebook segments, while also serving other players in the market.

Lall emphasized the importance of creating a robust component ecosystem to sustain the growth of India’s electronics manufacturing industry.

“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. We have already launched a display module, which will become operational in the next two to three quarters, along with mechanical and other modules,” Lall noted.

The company has also finalised the location of manufacturing of displays in parternship with HKC and expects manufacturing to start during Q1-Q2 of the next fiscal.

Dixon’s dedicated IT hardware manufacturing unit is set to begin trial production in February, with mass production slated for the first quarter of FY25-26.

“The unit will commence mass production of devices for HP and Asus. Mass production for Lenovo and Acer has already begun,” Lall revealed.