Dixon in talks with US, China hardware cos to manufacture laptops, ET Telecom
New Delhi: Noida-based Dixon Technologies is in talks with IT hardware companies based in the US and China for production of laptops under the revised production-linked incentive (PLI) programme for the segment.
The company plans to invest around Rs 250 crore over the next two-three years in building a new production facility and localisation efforts, said people with knowledge of the matter.
Talks are at an advanced stages with two clients, likely HP and Lenovo, which could potentially help the electronics manufacturing services player meet incremental production targets under the revised PLI scheme, they said.
“Dixon is talking to two major global brands, with a new production facility under works and expected to be operational in the next three-four months,” said one of the executives, who did not wish to be identified.
He said the new plant would have a production capacity of one million notebooks a year and include lines for producing printed circuit boards (PCBs) as part of the scheme’s localisation schedule.
“Dixon already has the relevant experience of setting up SMT (surface mount technology) lines for mobile phones and television, and will leverage that expertise to do the same for IT hardware. Doing so will help the company increase local value addition, which is a key target under the PLI scheme,” the second executive said.
He said the company’s wholly owned unit, Padget Electronics, has applied under the hybrid category of the revised PLI scheme, which mandates an investment of Rs 250 crore over a span of six years. But the company will be able to meet the investment criteria much earlier, in the next two-three years as it ramps up production.
ET’s queries to Dixon Technologies, HP, and Lenovo went unanswered till press time.
The company already makes notebooks for Acer. It was part of the first phase of the IT hardware PLI, which failed to attract big players and had to be revised by the government.
The revised PLI scheme has a financial outlay of Rs 17,000 crore and has seen 44 companies registering for it, including global firms such as HP and Dell, along with domestic companies Optiemus Electronics, Bhagwati Products, VVDN Technologies and others.
The registrations came amid the government announcing restrictions on free import of IT hardware products, putting in place a licensing regime on brands to push local production and address national security concerns.
The PLI scheme, approved by the Union cabinet in May, is expected to attract investment of Rs 2,430 crore with an additional incremental production of Rs 3.35 lakh crore, and is expected to generate direct employment of 75,000 people, Union electronics and information technology minister Ashwini Vaishnaw had said.
The revised scheme offers flexibility for applicants to choose 2023, 2024 or 2025 as the base year for starting production and envisages an incentive of up to 5% on incremental sales, more than double the roughly 2% incentive offered in the earlier version of the scheme.
It also has additional incentives of up to 3% for companies that use locally made components. The executives said Dixon Technologies will be able to meet the localisation target of making PCBAs for IT hardware, but other components such as memory modules and display panels will take time to set up as the ecosystem is not fully present yet.
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