Dixon Technologies is exploring a move into silicon photonics and advanced semiconductor packaging as it seeks to tap demand from artificial intelligence (AI) infrastructure, data centres and high-speed computing, marking a push beyond its traditional electronics manufacturing business.
The company is evaluating opportunities to manufacture high-speed optical transceivers and develop advanced packaging capabilities in India through acquisitions and partnerships. The proposed expansion would take Dixon into specialised, higher-margin manufacturing segments that are seeing growing demand as data centres require faster and more efficient data transmission.
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“We are attempting to bring this technology into India for servicing the global markets,” Vice Chairman and Managing Director Atul Lal said during the company's Q2 FY27 earnings call.
Lal said Dixon was pursuing opportunities in optical transceivers, advanced packaging and silicon photonics, identifying these as areas where global electronics manufacturing was seeing strong demand.
One of the initiatives has already taken shape through a joint venture with Taiwan's Gemtek to manufacture optical transceivers. Dixon is also pursuing other partnerships to establish capabilities in India, Lal said.
The company is looking at higher-frequency optical transceivers, including 800G and higher-speed categories, while exploring advanced packaging capabilities for data centres and networks.
The move is aimed at taking Dixon deeper into the technology value chain rather than limiting its role to assembling electronic products. Silicon photonics uses light to transmit data and is emerging as an important technology for high-speed data transmission in data centres.
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Margin Opportunity
Dixon expects these businesses to offer better profitability than conventional electronics manufacturing.
Group CFO Saurabh Gupta said margins in advanced packaging and silicon photonics were very high. He added that the return on capital employed could remain close to the company's existing group-level profile.
“The margins are very high and the investments are also in such a way that the ROC profile will be closer to what we do currently,” Gupta said.
Lal said the proposed expansion was an extension of Dixon's existing electronics manufacturing capabilities, but would involve deeper technology.
However, the plans are still at an early stage. Dixon has not announced a final investment commitment, manufacturing timeline or confirmed customer orders for its proposed silicon photonics and advanced packaging businesses.
The company said it was pursuing strategic acquisitions and partnerships to establish these capabilities in India, with the aim of serving global markets.
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