Electronics manufacturing services (EMS) firm, Kaynes Technology, has acquired land in Sanand, Gujarat to set up its outsourced semiconductor assembly and test (OSAT) unit, sources said.
The company plans to invest about Rs 5,000 crore for its chip project. The development assumes significance as Kaynes, which is venturing into semiconductor assembly through its subsidiary Kaynes Semicon, earlier talked about its plans to build the chip plant in Telangana at a capex of about Rs 3,000 crore.
Kaynes, however, is not shelving its Telangana unit and will have a couple of chip assembly lines there, while the advanced chip assembly and test project will get operated from Gujarat, a company executive said on the condition of anonymity. The Telangana unit will largely be utilised for EMS services by Kaynes that includes PCB (printed circuit board) manufacturing, among other components.
Infact, Kaynes has also submitted its application under the Rs 76,000-crore semiconductor incentive scheme for the chip project in Gujarat way back and is awaiting nod from the government. Officials said as Gujarat has a developed ecosystem with other major chip projects coming up in Sanand and Dholera, it makes sense for Kaynes to also set up their advanced facility there.
According to executives at Kaynes, the same has been done owing to demand from its potential customers.
An email query sent to Kaynes did not elicit any response.
In the April-June quarter earnings call with analysts, Kaynes Technology founder and managing director Ramesh Kanan said, “We have acquired land in the state of Gujarat where will be starting our construction shortly. Meanwhile, we also activated the collaboration and the team formation on onboarding is happening parallelly for our OSAT business. We expect a positive response in the OSAT business in FY26”.
Kanan said, the company has also got some more customers in the advanced packaging area and has been building the team.
On the revenue opportunity from the OSAT business, Jairam Sampath, whole-time director and chief financial officer of Kaynes said, “By FY30, we can expect about Rs 3,500 crore revenues in this. And my estimate is that the margins will be better than our existing business”.
According to Sampath, Kaynes has broad MoUs (memorandum of understanding) with four customers currently. “We still have to show them the plant before they can assign a particular product category to us,” Sampath said during the earnings call.
Overall, the company is targeting to have 13 chip assembly and test lines over the next 1.5-2 years with a volume of 1 billion chips annually, Kaynes SemiCon CEO Raghu Panicker had told FE in an interaction in March.
From the 46-acre Telangana plant, which is expected to be operational by August end, Kaynes through a few OSAT lines is primarily looking to serve automotive electric vehicle (EV) and industrial segments.
The company will initially look at power module packaging and micro-controller units for the EV domain.
Later, the company also has plans to do legacy semiconductor packages like quad flat no-leads (QFN) and small outline transistor (SOT), suitable for consumer electronics, automotive designs and power applications. Besides, it will also get into substrate-based semiconductor packages like Ball Grid Array (BGA), which have solder ball pins, used in electronic products to mount integrated circuits such as microprocessors.
In the April-June quarter, Kaynes revenue rose 70% YoY to Rs 504 crore led by strong traction in the industrials and automotive verticals. The company’s net profit rose 106% YoY to Rs 50.8 crore.
As of June, the order book of the company was at Rs 5,040 crore.