Kaynes Likely To Deliver India’s First Packaged Semiconductor Chip By July

Kaynes Semicon, a subsidiary of electronics manufacturing company Kaynes Technologies, is reportedly planning to deliver India’s first packaged semiconductor chip by July. 

Kaynes’s chief executive officer (CEO) Raghu Panicker told the ET that the pilot for the project is almost complete and the machinery and clean room facilities will be operational by May. 

After qualification testing of chips that’s scheduled for June, the company will handover the initial samples to US firm Alpha Omega Semiconductor 

“We have signed a definite multi year agreement with them, and they will consume almost 60% of our capacity in the first phase,” said Panicker. 

In February last year, Kaynes bought land in Gujarat’s Sanand to build its outsourced semiconductor assembly and test (OSAT) unit. A month after that the union cabinet approved the company’s proposal to set up a semiconductor unit with an investment of INR 3,300 Cr.

The company has been preparing customers, technology partners, and construction plans, even before they got approval, Panicker told ET. 

How Kaynes Is Revving Up India’s Semicon Mission?

Kaynes Technologies entered the booming semiconductor space in 2023 with its subsidiary Kaynes Semicon Private Limited. 

Kaynes Technologies is a four-decade-old listed integrated electronics manufacturer. With Kaynes Semicon, it is setting up a 47-acre OSAT facility. OSATs are third-party vendors that provide assembly, packaging, and specialised testing of integrated circuits (ICs) to semiconductor manufacturers. 

The semicon company aims to provide its cutting-edge chips across industries and applications such as automotive, including EVs, consumer electronics, telecom, and mobile phones. Kaynes is supported by an established electronics design and manufacturing (ESDM) business and government initiatives. 

In September last year, Kaynes’s proposal to set up an OSAT unit was approved under the India Semiconductor Mission (ISM). Its unit will have the capacity to produce 60 Lakh chips per day.

Besides Kaynes Semicon, the Centre has already approved Tata Electronics, CG Power, Micron Technology and Suchi Semicon to set up their respective units in the country. 

In June 2023, the cabinet approved Micron’s proposal for setting up a semiconductor unit in Gujarat. Following that, the government approved three more semiconductor units in February last year. 

While Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat and another semiconductor unit in Morigaon, Assam, CG Power is setting up one semiconductor unit in Sanand, Gujarat.

India’s Increasing Semicon Demand 

As the semiconductor industry rapidly grows in the country, the government is discussing plans for the rollout of the second phase of the India Semiconductor Mission. The ISM 2.0 comes amid rising need for semiconductor chips across India. 

MeitY secretary S Krishnan last week said that India’s semiconductor demand may likely reach $100-110 Bn by 2030 from the current demand of $45–50 Bn. 

In line with it, Krishnan said that India’s production should meet international standards so that some of the production also get exported. The country needs to establish that the products are “actually competitive and quality products that everyone wants to buy.

“We need to expand, we need to be bigger players, there is more investment that needs to take place,” he added. 

According to an Inc42 report, the Indian semiconductor market is projected to become a $150 Bn opportunity by 2030.