Dixon Technologies to build Xiaomi Smartphone assembly facility in Noida

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Dixon Technologies to build Xiaomi Smartphone assembly facility in Noida

Dixon Technologies to build Xiaomi Smartphone assembly facility in Noida

Industry News
Sep 18,23

Dixon Technologies (India) Ltd, a contract manufacturing firm headquartered in Noida, is currently in the process of establishing a sprawling assembly facility spanning 1 million square feet for the renowned Chinese electronics brand, Xiaomi. This facility marks one of two ambitious projects undertaken by Dixon, with the second facility expected to materialise in one of the southern states of India. The latter holds the potential to cater to the demands of various brands and product categories.

One of the officials, wishing to remain anonymous due to the confidential nature of the matter, disclosed that the new facility is being constructed in Noida. Once completed, it aims to manufacture up to 1 million smartphones per month. This investment is reported by Bloomberg to amount to Rs 400 crore over a span of three years, with an anticipated inauguration by year-end.

Both Dixon Technologies and Xiaomi have refrained from making any official comments on this matter.

It is worth noting that on May 31, Rajeev Chandrasekhar, the Union Minister of State (MoS) for Electronics and IT, revealed that Dixon had entered into an agreement with Xiaomi for the assembly and export of Xiaomi's smartphones.

In addition, Xiaomi has also entered into a local manufacturing arrangement for its wireless neckband earphones in the audio product category with the indigenous contract manufacturer, Optiemus Infracom Ltd, in May of this year.

Furthermore, Dixon is among the applicants seeking to benefit from the Centre's revised Production-Linked Incentive (PLI) scheme for IT hardware, as disclosed by a second official. It has initiated discussions with multiple laptop brands in India to establish assembly partnerships.

These developments are expected to gain momentum as the Indian government intensifies its efforts to promote local manufacturing across all segments of the electronics industry. On August 3, the Directorate General of Foreign Trade (DGFT) implemented restrictions on laptop imports, encouraging laptop brands to explore more local manufacturing and assembly agreements.

While subsequent clarifications by the government extended the timeline for brands like Apple, Dell, and HP to obtain licenses for increased imports until October 31, this shift in policy has positioned companies like Dixon, Bhagwati Products Ltd, and Flextronics International Ltd favourably for securing more such agreements.

However, Dixon's new facility in Noida is primarily poised to cater specifically to smartphone manufacturing. Smartphone production is increasingly sought after, despite India's local manufacturing efforts still predominantly consisting of assembly operations. This is partly due to the fact that critical components, such as processors and display chips, are primarily sourced from outside India—an issue the government aims to address through various incentive schemes.

Source: Mint