Dixon Tech starts making TVs for Samsung in India

Dixon Technologies, which commenced making smartphones for Samsung in India in November, has expanded its relationship with the Korean company to now make flat-panel TVs in India for the Korean giant.

Dixon is a contract designer and manufacturer of electronic and lighting goods, including LED bulbs, washing machines, TVs and mobile phones. It is famous for making TVs for Xiaomi.

In the financial year that comes to an end this month, the company is all set to double its total TV output to 2.2-2.3 million units, from 1.1 million TVs last year.

In other words, about 15% of all TVs sold in India will be assembled by Dixon.

The contract manufacturer started assembling TVs for Samsung on February 5, adding its first major customer after Xiaomi. It will manufacture models that are up to 65 inches in size for the new customer.

Samsung also has its own factories where it makes TVs, washing machines, refrigerators and other products for India.

Currently, Dixon has a capacity of producing around 3.6 million TVs a year. By May this year, it expects to have increased that capacity to 4.8 million, boosted by the Samsung contract.

According to Dixon officials, the total number of TVs produced by the company next year (FY21) will be higher by around 35-40% compared to the current year.

In addition to Xiaomi and Samsung, the company also makes TVs for certain smaller brands in India.

In addition, it is chasing new clients. “We are in discussions with two more multinational brands, global brands who are starting their production and we see that should start sometime in end of Q1 next fiscal [June 2020],” said a company official.

He said the decision by Samsung to entrust it with the assembly of flat panel TVs is a reflection of the positive results that Dixon has been able to deliver to the Korean company.

“We started Samsung relationship only in 2017-2018, when we started the semiautomatic [washing machines] and then semi automatic volumes grew, and on the basis of the performance, they gave us an opportunity in the mobile phone business [in November] which is the turning point for us, and then we have been given the TV business.

“So one I feel across all the verticals the share of a pie of Samsung business will increase. New opportunities we keep talking to them they are extremely positive towards them,” he said.

An estimated 14 million (1.4 cr) flat panel televisions are sold in India, out of which 40-45% are sold via online retailers. Around 25% of all TVs sold in India are estimated to be smart TVs, while the share of smart TVs in terms of revenue easily cross 50%.

Within the smart TV business, Xiaomi is reported to be the undisputed leader with its MiTV brand commanding an estimated market share of 33%, while Samsung is reported to be at second place with a share of around 14%, followed by LG, Sony and TCL.

However, the lower end of the market — in the Rs 5,000-15,000 price range — also has a strong presence of smaller, online-focused brands.

Speaking on the impact of Coronavirus, Dixon expects less disruption on certain lines of business — such as making smartphones for Samsung — where the raw material comes from non-Chinese factories.

However, in certain other lines of business, such as TV assembly where 80% of the raw material is sourced from China, a prolonged shut-down or disruption can have an impact.