Dixon, Samsung & LG Expand India Manufacturing for AI Data Centre Components

India’s electronics manufacturing industry is moving beyond smartphones, televisions and consumer appliances into specialised hardware required by artificial intelligence (AI) data centres. Dixon Technologies, Samsung and LG are among the companies expanding their manufacturing ambitions to include optical networking equipment and advanced cooling systems, targeting a market experiencing rapid global demand.

The shift comes as AI applications require increasingly powerful computing infrastructure, creating demand for high-speed optical connections, specialised air-conditioning systems and other data centre equipment. Dixon is preparing to manufacture optical transceivers through a partnership with Taiwan’s Gemtek Technology, while Samsung and LG are expanding into specialised heating, ventilation and air-conditioning (HVAC) products. These developments could help India become an alternative manufacturing and export base for critical AI infrastructure components.

Dixon Technologies Enters AI Data Centre Optical Equipment

Dixon Technologies is preparing to expand into optical networking components used in AI data centres and hyperscale computing facilities.

The company is partnering with Taiwan-based Gemtek Technology to manufacture optical transceivers and bidirectional optical sub-assemblies (BOSA) in India.

The partnership will operate through Dixon Electroconnect, a wholly owned Dixon subsidiary that is being restructured into a joint venture. Dixon will hold a 60% stake, while Gemtek will own the remaining 40%.

The proposed manufacturing operation is expected to begin in the fourth quarter of FY27, covering January to March 2027.

Optical transceivers are important components in modern data centre networks. They convert electrical signals into optical signals and back again, allowing servers, storage systems and computing equipment to exchange information at high speeds.

This technology is particularly important for AI infrastructure because large computing clusters contain thousands of processors that must communicate with one another while handling enormous volumes of data.

As AI models become more complex, data centres require faster networking equipment with higher bandwidth and lower latency.

Dixon’s partnership with Gemtek is intended to help the company participate in this growing market. Gemtek will contribute its technical expertise, while Dixon will bring manufacturing capabilities and its established Indian operations.

The company is also exploring opportunities in silicon photonics and advanced packaging, although these remain broader development ambitions rather than confirmed commercial manufacturing operations.

Samsung Expands Data Centre Cooling Manufacturing in Pune

Samsung is entering another important segment of AI infrastructure through specialised cooling equipment.

Its group company FläktGroup has established a dedicated manufacturing facility in Pune to produce HVAC systems for data centres and other critical infrastructure.

The facility was inaugurated in August 2026 and is expected to scale production to approximately 6,500 units annually.

The products include specialised air-handling and cooling systems designed to manage the heat generated by high-performance computing equipment.

Samsung acquired FläktGroup in November 2025, strengthening its presence in the global heating, ventilation and air-conditioning market.

The Pune facility is intended to serve Indian customers as well as export markets across the Asia-Pacific region.

The expansion is significant because cooling has become one of the most important infrastructure requirements for AI data centres.

Traditional data centres already require extensive temperature-control systems, but AI facilities can generate substantially more heat because of the high computing density of their servers.

As a result, operators increasingly require specialised cooling solutions capable of maintaining stable operating temperatures while controlling electricity consumption.

By manufacturing these systems locally, Samsung can position India as an important production base for its data centre infrastructure business.

LG Plans Specialised HVAC Manufacturing in Sri City

South Korean electronics manufacturer LG is also preparing to expand its industrial cooling operations in India.

The company plans to manufacture specialised HVAC solutions at its upcoming facility in Sri City, Andhra Pradesh. The plant is expected to begin operations in December 2026, according to industry executives cited by The Economic Times.

The manufacturing expansion is aimed at meeting demand from AI data centres and other infrastructure projects requiring advanced temperature-control systems.

LG’s move comes as the company seeks to strengthen its manufacturing presence in India while accessing opportunities created by the expansion of cloud computing and artificial intelligence.

The company is competing in a market where data centre operators increasingly need specialised equipment rather than conventional commercial air-conditioning products.

These systems must operate continuously, maintain precise environmental conditions and support facilities where equipment downtime can have significant financial consequences.

The Sri City facility could also support LG’s wider ambitions to serve customers in India and potentially develop export opportunities as local manufacturing capabilities expand.

Why AI Data Centres Need Specialised Components

AI data centres are different from conventional computing facilities because of the amount of processing power required to train and operate advanced models.

Modern AI workloads rely on large clusters of graphics processing units and other specialised processors. These systems must exchange data continuously, creating significant requirements for high-speed networking equipment.

Two categories of components are particularly important.

1. Optical networking equipment

Optical transceivers help transfer information between servers and networking devices using light signals.

They support high-speed communication across data centre infrastructure and are becoming increasingly important as AI computing clusters grow.

Dixon’s partnership with Gemtek is aimed at manufacturing products in this category.

2. Advanced cooling systems

AI processors generate substantial heat during intensive computing operations. Without effective cooling, equipment can experience reduced performance, reliability problems and potential hardware damage.

Specialised HVAC systems help regulate temperatures and maintain stable operating conditions.

Samsung and LG are expanding their manufacturing activities in this segment, while Indian companies such as Blue Star are also pursuing data centre cooling opportunities.

The two categories address different infrastructure requirements, but both are becoming increasingly important as AI data centre construction accelerates.

Blue Star and PG Electroplast Also Explore Opportunities

The expansion is not limited to multinational companies.

Indian manufacturers are also examining opportunities in the data centre cooling market.

Blue Star managing director B. Thiagarajan said the company expects significant growth in orders from data centre projects.

He estimated that approximately ₹10,000 crore to ₹12,500 crore worth of data centre-related orders could be finalised during the year. Blue Star had already indicated that it was close to ₹2,000 crore in orders and expected another ₹2,000 crore.

PG Electroplast is also evaluating an entry into specialised HVAC manufacturing for AI data centres.

Its management has highlighted that cooling systems for AI infrastructure require substantially different technology from conventional residential air conditioners.

These developments indicate that India’s established electronics and appliance manufacturers are beginning to view data centre infrastructure as a potential new business opportunity.

However, companies will need specialised engineering capabilities, manufacturing standards and customer qualifications before they can compete successfully in this market.

India Wants to Become an Alternative Manufacturing Hub

The expansion comes as India attempts to strengthen its position in the global electronics supply chain.

The country has already attracted significant investment in smartphone assembly and consumer electronics manufacturing.

However, many high-value components used in electronic products continue to be imported.

Moving into optical networking equipment, specialised cooling systems and advanced packaging could help Indian manufacturers capture a larger share of the value generated by technology infrastructure.

The opportunity is also connected to the expected growth of India’s domestic data centre industry.

The government has estimated that approximately $200 billion could flow into India’s data centre sector, creating opportunities for infrastructure developers, equipment suppliers and electronics manufacturers.

Global technology companies are also looking for alternatives to concentrated manufacturing supply chains, creating opportunities for India to attract additional production.

For manufacturers, the data centre market could offer higher-value products and export opportunities beyond traditional consumer electronics.

The Bigger Picture

The entry of Dixon, Samsung and LG into AI data centre component manufacturing reflects a broader transformation in India’s electronics industry.

The country is attempting to move beyond assembling finished products towards manufacturing specialised components that are essential to global technology infrastructure.

AI data centres provide a new opportunity because they require sophisticated networking, power management and cooling equipment. These products can also offer manufacturers access to different customer segments, including hyperscale cloud providers, telecom companies and large enterprise technology businesses.

However, India is still developing its capabilities in several advanced component categories. Manufacturing optical modules locally does not necessarily mean that every critical semiconductor or photonic component will also be produced domestically. Initial production may continue to depend on imported high-value parts.

Looking Ahead

The next several months will be important for determining how quickly these manufacturing plans translate into commercial production. Dixon’s Gemtek partnership is targeting operations in the final quarter of FY27, while LG’s Sri City facility is expected to begin operations in December 2026. Samsung’s Pune facility is already established and is expected to scale its annual production capacity.

For India, the opportunity extends beyond supplying equipment to domestic data centres. If manufacturers can meet international quality and performance requirements, the country could become an important export base for AI infrastructure components. The success of this transition will depend on technology partnerships, component localisation, skilled engineering capabilities and sustained demand from global data centre operators.