Kaynes Semicon is looking to significantly scale up its semiconductor packaging business, with plans for a new $1 billion OSAT (Outsourced Semiconductor Assembly and Test) project in Gujarat under the government’s India Semiconductor Mission 2.0, even as the company ramps up commercial production at its first unit.
Among the areas being considered are advanced packaging and LED/micro-LED. The LED project could involve an additional investment of about $300 million.
“We will apply for new projects under the mission’s second phase, Semicon 2.0 — a corpus of about `9,500 crore, a proposal under the packaging pillar,” Raghu Panicker, CEO,Kaynes Semicon, told FE.
Kaynes also plans to begin work on Unit 3 soon, with commercial operations expected next year.
Panicker said that the Unit 1, running at a low-volume rate of about 3.6 million units a year, or roughly 300,000 units in a month, continues to serve AOS. “While, Unit 2 — being built out for Japan’s Fujitsu and Germany’s Infineon, is on track to be ready for qualification by the end of November or early December, after which select products will move into high-volume production,” he added.
“High volume production will happen in Unit 2, the capacity for which is 1.2 billion units per year,” Panicker added.
The company expects the semiconductor business to generate Rs 250-300 crore in revenue this year. It has already booked close to Rs 100 crore, although revenue recognition is still at an early stage.
Kaynes’ anchor customer is US-based Alpha & Omega Semiconductor (AOS), for which it is packaging its IPM5 module alongside a newer IPM7 and additional packages.
Kaynes started commercial production in March 2026, roughly a year after the company first supplied samples to customers.
Under Semicon 1.0, the company has allocated an investment corpus of `3,307 crore to its semiconductor plant in Sanand, Gujarat. This capital is split across three progressive manufacturing units designed for rapid scaling.
Kaynes said its semiconductor customers are bringing the technology required for their products, unlike a conventional technology acquisition model.
In the case of AOS, this includes wire-bond, BGA and power-module technologies. Most of this work involves mature, analog-heavy process nodes of 65 nanometres and above.