Dixon Technologies, a prominent electronics contract manufacturer, has announced plans to establish a new facility in Chennai dedicated to producing laptops for four leading notebook brands in India. According to a report from the Economic Times, the new factory is expected to be operational within the next 8 to 10 months, marking a significant expansion for the company in the IT products sector.
Atul B. Lall, chairman and managing director of Dixon Technologies, shared insights during the company’s recent earnings calls. He stated, “We have the top four customers out of the top five local brands operating in the country. For this, a new campus is being planned in Chennai. The site has been identified and the resources have been acquired.” This facility is anticipated to become a crucial growth engine for the company, replicating the success Dixon has achieved in mobile manufacturing.
The Chennai plant will join Dixon’s existing operations, which have seen considerable success in producing notebooks for brands such as Acer. Furthermore, the company is in the process of introducing Lenovo laptops into its production line, with full-scale manufacturing expected to commence in the third financial quarter of FY25. “The Chennai plant should be operational by Q4 of the current financial year or Q1 of next financial year,” Lall confirmed, noting that the market potential for IT products in India is nearly $10 billion.
Dixon Technologies has recently reported impressive financial results, with quarterly revenues reaching Rs 6,588 crore, reflecting a staggering 101% year-on-year increase for the June quarter. The company’s net profit surged by 109%, totaling Rs 140 crore, primarily driven by growth in its mobile and electronics manufacturing services (EMS) divisions. This expansion has been bolstered by a substantial rise in production volumes for major clients like Motorola and Xiaomi.
Lall highlighted that Motorola is experiencing strong growth, with a monthly order book of approximately 900,000 to 1 million smartphones, including a healthy export demand. Xiaomi’s production is also ramping up, with the company achieving around 700,000 units per month since July, and higher volumes anticipated during the upcoming festive season.
Notably, around 35% of Motorola phones manufactured by Dixon are exported to markets such as the United States and other countries. The company is also collaborating with the Chinese Original Design Manufacturer (ODM) Longcheer, achieving production volumes between 400,000 to 450,000 units per month, with plans to increase this to 700,000 units monthly.
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In addition to its expansion in the notebook sector, Dixon Technologies is set to onboard two more global Android handset brands as customers, further diversifying its client portfolio. The company is also nearing the completion of its acquisition of Ismartu, the manufacturing arm of Transsion Holdings, pending approval from the Competition Commission of India. Once finalized, this acquisition will enable Dixon to control 55-60% of smartphone production capacity in India.
Looking ahead, Lall indicated that after scaling up smartphone assembly, Dixon’s next focus will be to enhance its manufacturing capabilities. This includes incorporating display modules, precision components, mechanics, and other essential modules to improve its overall production efficiency and product offerings.
As Dixon Technologies embarks on this ambitious expansion into the laptop manufacturing sector, the company is poised to become a significant player in India’s growing IT products market. With its strategic investments and strong client relationships, Dixon aims to replicate its success in mobile manufacturing and address the increasing demand for laptops in the country. The new Chennai facility is not just a milestone for the company, but also a testament to the burgeoning electronics manufacturing landscape in India, driven by innovation and adaptability in a rapidly changing market.
