Amber Enterprises may invest ₹2,000 cr to set up printed circuit board facility

New Delhi: Amber Enterprises is likely to invest ₹2,000 crore to set up a printed circuit board (PCB) manufacturing facility in the country, according to two people aware of the development.

The likely investment follows its acquisition of a majority stake in Ascent Circuits, a printed circuit board assembly maker, as the group undertakes backward integration towards becoming a full-fledged electronics manufacturing services provider.

“The investment is expected to take place within the next few months,” said one of the persons cited above, asking not to be named.

Amber Enterprises, which is transitioning from being primarily a residential air-conditioning manufacturer into a diversified business-to-business electronics goods maker, will ramp up backward integration, aided by its pact with South Korean firm Korea Circuit that has long been producing printed circuit boards. A printed circuit board is a rigid, flat structure that has electrical circuitry to connect various components of an electronic device.

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The two firms said earlier this year that they will develop an entire portfolio of PCBs required for various applications in India’s electronics manufacturing, such as high-density interconnect, flexible PCBs, semiconductor substrate, multilayer, double-sided and single sided PCBs.

Meeting Demands 

The different kinds of PCBs will enable it to offer services and solutions to industries spanning mobile, information technology, semiconductors, home appliances, consumer electronics, aerospace, defence, medical, energy solutions, automotive, telecom and data centres.

This will enable Amber to meet domestic as well as export demand, at a time when India is looking to increase its focus on creating capacities for electronics manufacturing of not only devices likes mobile phones, laptops, personal computers, and servers, but also of the components required for making these products for which it relies heavily on imports from China.

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India has been encouraging local manufacturing of electronic devices and components through policies, including the production-linked incentive scheme in addition to an existing Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors or SPECS. BNP Paribas categorises India’s electronic manufacturing industry as one of its fastest growing, which is likely to grow at 27% CAGR over FY23-FY27 to reach $100 billion in total revenue.

Domestic electronic manufacturing service suppliers such as Amber and Dixon Technologies are set to capture an increasing share of the total market as they develop their products, capabilities, quality, and relative competitiveness, the brokerage said in a report, noting that revenues captured by domestic suppliers are expected to more than double to $55 billion by FY27.

Expansion Plans

Meanwhile, India has imposed anti-dumping duty on printed circuit board imports from China and Hong Kong, for five years, which also gives companies like Amber a clear road ahead for building local manufacturing, said experts.

"The government’s decision to impose anti-dumping duty on imported PCB denotes the underlying growth story for India’s EMS play. This will generate opportunities for localisation of bare boards in country and reduce import dependencies. We have been catering to PCB assembly for quite some time, and now look forward to developing the entire PCB of various layers which includes single layer, double layer, multilayer, HDI, flex and substrates. Our association with South Korea’s Korea Circuits will further bolster our electronics play (EMS), enveloping the entire manufacturing portfolio of PCBs required for various applications. Through this strategic partnership, we will cater to the growing demand for PCBs in India," said Jasbir Singh, chief executive of Amber Enterprises in response to questions from Mint. 

Sudhir Goyal, chief financial officer said last month in the earnings call for Q4FY24 that the company was evaluating expansion plan for the printed circuit board for Make in India on the back of marquee customer additions in auto and IT-related products category and consumer durables. However, it will decide on the capacity taking into consideration government incentives.

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 Singh also told analysts that Ascent Circuits was getting a big inflow of large auto customers as well as enquiries, which can lead to a 100% growth for the company based on the expected demand and capacity expansion.

“We want to expand the capacities in line with the government incentives. We are also meeting the ministry of electronics and information technology officials for clarifying on this SPECS scheme and once the clarification comes and the customer commitments are onboarded, then definitely we will roll on. We have a plan to bring up India's largest PCB manufacturing plant for Ascent,” he said in the earnings call.

He did not respond to the specific query on investments.