Homegrown contract manufacturer Optiemus Electronics Limited (OEL) is forming a strategic partnership with $30 billion iPhone-maker Wistron in India to jointly make mobile phones, laptops, IoT and IT hardware devices and Automotive- EV products. Under the deal, OEL will invest Rs 1,350 crores in the next 3 to 5 years with an aim to achieve a revenue of Rs 38,000 crores in multiple product segments.
With the tie-up, both companies are aiming to leverage the Indian government’s mobile and IT hardware production-linked incentive (PLI) schemes.
This is their second strategic collaboration in India. Both companies had previously formed a joint venture, which ended recently with OEL’s parent company, Optiemus Infracom Limited, buying Wistron’s 19.91% share in the company.
The previous joint venture ended because their business was not active and many of their previous clients like HTC and BlackBerry exited the Indian handset market.
“Given the market dynamics globally, a shift is happening towards India and the government has come with PLIs. It makes sense to do things together. Wistron has a vision for India. We are now reviving the relationship again. We have already been exchanging ideas and expertise,” A. Gururaj, MD, Optiemus Electronics Limited told ET in an interaction. “Last time it was only mobile, this expansion now goes beyond to other categories.”
Under the handset segment, Wistron being a multinational company can only cater to the manufacturing of $200 and above devices, while OEL being an Indian company can make devices across the price ranges.
“This partnership gives both companies cater to customers who have products across various price points. It covers the entire PLi incentive package,” Gururaj said. He previously served Wistron as the India managing director.
“Wistron is committed to creating a Global Design & Manufacturing Hub in India for Electronics & Telecom… a World-Class Design and Manufacturing infrastructure in India is the need of the hour to fulfill the untapped demand from Global Players where quality is paramount,” David Shen, President & CEO, Wistron Smart Devices said in a statement separately. “PLI will be a key enabler to bridge any gaps in developing the ecosystem for the next decade.”
“We have been working together for the last 5 years. We do commit to the Make in India policy. We came in 10 years ago and built business quickly in the last 4 years. from 1000, we have 10,000 employees in India. We see India becoming a very big wearable market and even 5G phones are a big opportunity along with serve and storage for cloud services. We can grow business together,” Shen said on Tuesday.
Wistron, which has a presence in the Southern part of the country, will now have a presence in North India through OEL’s Noida factories. “They will get customers in this part of the country since some customers are very specific about having facilities in North India,” he said.
Gururaj said that both companies will jointly acquire new customers and may look at opening new facilities to meet capacity demand. “Current capacity of 2 million devices is sufficient at Noida units.”
OEL is currently working with three companies, including audio products maker Noise. Gururaj said that both companies are in advanced talks with some large companies across categories.
“This venture is not just about the Indian market and will focus on domestic along with exports. It will also focus on international customers,” he added.
The partnership is also backed by joint product development, engineering capabilities, software, and firmware development besides giving a boost to employment generation in the country. OEL plans to ramp up its manpower significantly to reach a figure of around 11,000 in the next 3 to 5 years. It currently has around 300 employees working in its two Noida facilities.
The alliance will also work towards creating a joint hub in India for Design Solutions Product Development apart from bringing smart manufacturing to India. They will work towards the design and manufacturing of tablets, laptops, hearables/wearables, telecom products, IoT/Industrial IoT, smart meters/devices and automotive-EV products.
“Design is a major focus area. It will address product development actively. We will partner with design companies and hire design people and get Taiwanese people to come to India,” Gururaj said.