Kaynes Semicon to have 1 billion chip volume, says CEO – Technology News

March 25, 2024

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Kaynes Semicon, the semiconductor arm of Kaynes Technology, 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, the company’s CEO Raghu Panicker told FE in an interaction.

Kaynes Semicon is close to receiving approval on its chip assembly and test – OSAT (outsourced semiconductor assembly and test) unit in Telangana under the government’s Rs 76,000 crore semiconductor incentive scheme.

“Kaynes will be building its semiconductor business in phases and is open to expanding in other states depending on the customer and product demand,” Panicker added.

In October last year, Kaynes announced its plans to invest Rs 2,800 crore in the OSAT facility in Telangana. The company has already started construction at the plant.

From its first OSAT plant, the company is primarily looking to serve automotive electric vehicle (EV) and industrial segments. The plant will have a couple of chip assembly lines.

“In the EV domain, we will be focussing on power modules packaging. The second vertical we will go after is industrial, where we will look after micro-controller units (MCUs). So, these are two markets we are going after,” Panicker said.

The company will 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.

“We are suppliers of modules in the EMS (electronics manufacturing services) to automotive, EV. We are suppliers of BLDC (Brushless Motor Controller) modules to industrial customers,” Panicker said, adding that the two areas have huge demand and therefore Kaynes will do these semiconductor packages first.

The company has tied-up with Japan-based semiconductor company AOI, which will come on board as a technology partner for the OSAT facility.

While Panicker did not not talk about the revenue opportunity, he said, “it will be largely from exports initially and slowly we will develop the local market”.

The company is in talks with a couple of semiconductor OEMs (original equipment manufacturers) for exports from the Telangana factory. “But parallely, we are also talking to three big customers in India, to address the local market demand,” Panicker said.

With regard to the Telangana OSAT plant, the company started the construction in October.

When asked if the company is shelving plans to set up the chip unit in Telangana and moving to Gujarat, Panicker said, “You got the land, you have raised money, you spent money, how can you shelve it? That is a 46 acre land, we are only doing plant 1 now. We have already completed 25% construction. We already have three customers who have seen the plant, so there is no question and no indication from the government and anyone to move out,” Panicker said, adding that as part of the plan the company is building its semiconductor business in phases, which are not place dependent, but depends on customers and product.

“As in when our customers want us to do something specific in certain regions we will go there, depending upon the talent availability and that could be any place. I am not talking about any specific names,” Panicker added.

Kaynes expects to start the Telangana facility in April. However, a major scale up and revenue opportunity for the company is expected to come in FY26, it had said during the earnings call last month. In the next phase, the company is looking for advanced packaging and component semiconductors, and is also expected to loop in other technology partners.

“Our phase 2 could have certain other criteria, certain other markets, and certain kinds of packages which we can do in other states but that is not concluded yet because our file is still with MeitY (ministry of electronics and IT) for final approval,” Panicker said.

The company is hopeful of getting approval on the semiconductor project from the government soon.

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