Tata Electronics is apparently looking to expand its customer base beyond Apple by forming alliances with Chinese smartphone behemoths Xiaomi and Oppo. The company’s goal to dominate the electronics manufacturing services (EMS) market is reflected in this action.
“Tata Electronics has realised that in order to be a top player in the electronics manufacturing services (EMS) ecosystem, it has to focus on scale now,” the media cited industry sources as saying.
“They are actively engaged in discussions with leading Chinese smartphone manufacturers, including Xiaomi and Oppo, to initiate component manufacturing,” one of the sources said.
Although preliminary discussions with Vivo were in progress, this partnership has probably been impeded by the company’s recent joint venture with Dixon Technologies.
“They were initially also in talks with Vivo, but it is unlikely that the Vivo partnership will go through as they have entered into a joint venture with Dixon,” the source told media.
Vivo and Dixon Technologies’ alliance, which was revealed last month, would be concentrated on producing electrical gadgets, such as smartphones. Vivo India will maintain a 49% ownership in the joint venture, while Dixon will own 51%.
Tata Electronics, a major supplier of iPhone enclosures at the moment, wants to follow Foxconn’s lead by diversifying into more expensive parts like camera and display modules. It is anticipated that Tata Electronics’ strategic move will increase rivalry with Dixon Technologies, situated in Noida.
“These players will use the Tata’s wanting to get into the space not just to diversify their supply chain but also as a leverage point,” another person in the know said.
“Dixon is becoming very big so they are getting more and more selling power. As you become big, it is hard to keep the same rates going. What Xiaomi was getting for manufacturing earlier, they will not get the same price,” the sources added.
N Chandrasekaran, the chairman of Tata Sons, has declared that the business plans to build nine new facilities in the next two years, supported by a $18 billion investment in semiconductors and electronics.
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