Another feather in India’s crown of semiconductor ecosystem gets added as domestic company Kaynes’ ₹33.07 billion OSAT unit in Sanand, Gujarat, receives a nod from the Union Cabinet.
The Union Cabinet has greenlighted Mysuru-based Kaynes Semicon Pvt Ltd to set up an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat.
This project, involving an investment of ₹33.07 billion, is anticipated to produce 6.3 million chips daily, catering to various sectors such as automotive, electric vehicles, consumer electronics, telecommunications, and mobile phones.
The Centre will provide half of the total investment, amounting to ₹16.53 billion, while 20%, or ₹6.61 billion, will come from the Gujarat government. The company will self-finance the remaining 30%, which totals ₹9.92 billion. It secured funding for this project in December of the previous year.
At a press conference in New Delhi, Union Electronics and IT Minister Ashwini Vaishnaw announced that the Cabinet had approved Kaynes Semicon’s new plant, which will occupy 46 acres. He also mentioned that under design-linked incentives, 13 companies have begun chip and System-on-Chip design, with some receiving venture capital funding.
With this, Kaynes has become the fourth company in India to receive Union Cabinet approval. This initiative supports the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India, which was introduced in December 2021 with a budget outlay of ₹760 billion.
As reported by the Economic Times, Raghu Panicker, CEO of Kaynes Semicon, stated that the new facility will feature 13 assembly lines, incorporating wire-bond and substrate technologies, and will specialise in advanced packaging with co-packaged optics (CPO) in silicon photonics.
He added that, after the plant becomes operational, the company’s pricing will be more competitive than China’s due to government subsidies and production-linked incentives.
Additionally, an automated test equipment line will be established for Kaynes’ clients, positioning the company as a test engineering service provider for their OSAT customers.
Kaynes will collaborate with Infinipack on semiconductor packaging design and UST on automated test equipment.
It has already secured three customers, including two semiconductor firms from Taiwan and the US focusing on automotive packaging. LightSpeed Photonics is set to be its first paying client.
Panicker outlined a 100-day plan to establish the plant, including constructing a clean room, ordering machinery, and beginning construction. The land-levelling has been underway for a month, with base work completed in the past three to four months.
Soil and structural tests are finished, contractors are in place, and design work is complete. The company has hired around 25 senior executives and ten freshers from Women Beyond, a non-profit organisation, who are currently in training.
Earlier this year, in June 2023, the Union Cabinet approved the setup of several semiconductor facilities, including those by Tata Electronics in Dholera, Gujarat, and Morigaon, Assam, as well as another plant by CG Power in Sanand.
These projects are projected to draw investments of nearly ₹1.5 trillion and deliver a total production capacity of around 70 million chips per day. They are forecasted to begin commercial production by 2026.
Furthermore, Micron Technology, an American chipmaker, is establishing India’s first advanced semiconductor fabrication plant, also in Sanand, Gujarat, with expectations for it to be up and running by late 2024.
This brings the number of semiconductor facilities in development in India to four, including three in Gujarat and one in Assam.
This development is a response to the global chip shortages experienced during the COVID-19 pandemic, underscoring the urgent need for self-reliant semiconductor manufacturing.
It aligns with India’s goal of becoming a key player in the semiconductor industry, aiming to match the capabilities of major producers such as China, the US, South Korea, Taiwan, and Japan.
