Electronics makers wait for war impact as commodity prices rise

New Delhi: India’s electronics manufacturing services (EMS) firms are in wait-and-watch mode as the West Asia war disrupts the tech component supply chain and pushes commodity prices upward. While Dixon Technologies and Syrma SGS aren’t factoring pricing and supply chain disruptions into account right away, top executives believe the next few quarters will be key for users, brands and shareholders alike.In an interview with Mint, Sunil Vachani, cofounder and executive chairman of Dixon, said that industry bodies are currently evaluating “at a broad industry level how long it will take for capacities of commodities and components, which are destroyed in the war, to come back up.”“The gas supply chain disruption wouldn’t be affecting us, but it will likely hit air conditioner manufacturers directly,” Vachani said.

While rising component costs may be passed to clients and hit demand, the specific impact on consumers is currently too difficult to quantify, he added. Mint could not independently determine the percentage rise in the commodities that Vachani mentioned above.

Engineering plastics are a key component of the internal structures of mobile phones, laptops and more. High-impact polystyrene, meanwhile, is a key component of exterior mouldings of consumer gadgets.Jasbir Singh Gujral of Syrma SGS said the war and rising prices, depleting electronics supplies, wouldn't affect the company’s operating margin in the March quarter.Component prices are being adjusted for rising material and oil costs, he said, adding that while there are pass-through clauses, balancing costs between vendors and customers remains a constant tug-of-war.