Kaynes Purchases Land in Gujarat to Construct a Semiconductor Unit

Nitin Konde, Apoorva Bajj

Aug 21, 2024 — 2 min read

Kaynes Purchases Land in Gujarat to Construct a Semiconductor Unit

Kaynes Technology, an Electronics manufacturing services provider, has bought some property in Sanand, Gujarat, to establish an OSAT (outsourced semiconductor assembly and test) unit.

In order to fund its chip project, the corporation intends to spend around INR 5,000 crore. This is a major milestone since Kaynes, via its subsidiary Kaynes Semicon, is expanding into semiconductor assembly. Earlier, Kaynes had mentioned ambitions to construct a chip plant in Telangana, with a capital expenditure of over INR 3,000 crore.

Why in Gujarat?

Interestingly, Kaynes had previously applied for the chip project in Gujarat through the government's INR 76,000-crore semiconductor incentive plan and it is now just waiting for approval. According to officials, Kaynes would be wise to establish their advanced facility in Gujarat due to the state's robust ecosystem and the presence of other large-scale chip projects in Sanand and Dholera.

Similarly, this has been done in response to demand from prospective clients, pointed out officials of Kaynes.

On the other hand Kaynes will keep its Telangana plant running with a few of chip assembly lines, while the advanced chip assembly and test project would be run out of Gujarat. Among other things, Kaynes will use the Telangana facility for EMS services, which include making printed circuit boards (PCBs).

On the Revenue Front

According to Ramesh Kanan, founder and managing director of Kaynes Technology, the firm has recently purchased property in Gujarat and plans to begin construction there. Concurrently, the company is forming a team to handle onboarding for its OSAT business and has initiated the collaboration. The OSAT business is anticipated to have a positive response in FY26.

A few more clients have come on board in the advanced packaging space, and the company has been actively recruiting new team members, added Kanan. Kaynes SemiCon CEO Raghu Panicker informed media that the company aims to have thirteen chip assembly and test lines in the next one and a half to two years, producing one billion chips per year.

With the 46-acre Telangana factory set to go live by the end of August, Kaynes plans to target the industrial and electric vehicle (EV) markets through a few OSAT lines.

Future Expectations

In the beginning, the business will focus on electric vehicle (EV) domain power module packaging and microcontroller units.

In the future, the business intends to produce legacy semiconductor packages such as tiny outline transistors (SOTs) and quad flat no-leads (QFNs), which are well-suited for use in consumer electronics, vehicle designs, and power applications. Ball Grid Array (BGA) semiconductor packages, which use solder ball pins to install integrated circuits like microprocessors, are another place it will end up.

Revenue for the April–June quarter at Kaynes increased 70% year over year to INR 504 crore, driven by robust growth in the industrials and automotive sectors. Net profit for the year increased 106% to INR 50.8 crore for the business.