Kaynes Semicon Gears Up for Landmark Chip Delivery
Kaynes Semicon, a subsidiary of the electronics manufacturing firm Kaynes Technologies, is poised to achieve a historic milestone for India’s semiconductor industry. The company is on track to deliver India’s first packaged semiconductor chip by July, marking a significant step in domestic chip manufacturing.
Raghu Panicker, CEO of Kaynes Semicon, confirmed to The Economic Times that the pilot phase of the project is nearing completion. The company expects its machinery and clean room facilities to be fully operational by May, followed by qualification testing in June. Upon successful validation, the first batch of packaged chips will be supplied to Alpha Omega Semiconductor, a US-based firm.
Strategic Partnership and Capacity Utilization
Kaynes Semicon has secured a multi-year agreement with Alpha Omega Semiconductor, which is expected to consume 60% of its initial production capacity. This strong demand underscores the market’s confidence in Kaynes’ capabilities.
The company had proactively acquired land in Sanand, Gujarat, in February 2024 to establish its Outsourced Semiconductor Assembly and Test (OSAT) unit. The Union Cabinet approved Kaynes Semicon’s proposal in March last year, greenlighting an investment of ₹3,300 crore for the facility. Notably, Kaynes had already begun preparatory work—including customer engagement, technology partnerships, and construction planning—before formal approval.
Kaynes Technologies’ Expansion into Semiconductors
Kaynes Technologies, a four-decade-old electronics manufacturer listed on the stock exchange, entered the semiconductor space in through its subsidiary, Kaynes Semicon Private Limited. The 47-acre OSAT facility represents a strategic expansion, as OSATs play a critical role in semiconductor supply chains by providing assembly, packaging, and testing services for integrated circuits (ICs).
Kaynes Semicon aims to supply chips for diverse sectors, including:
- Automotive (especially electric vehicles)
- Consumer electronics
- Telecom and mobile devices
The company benefits from Kaynes Technologies’ existing Electronics System Design and Manufacturing (ESDM) expertise and government incentives under the India Semiconductor Mission (ISM).
Government Support and Broader Semiconductor Landscape
In September last year, Kaynes Semicon’s OSAT proposal was approved under the India Semiconductor Mission (ISM). The facility is projected to produce 60 lakh (6 million) chips per day at full capacity.
Kaynes is among several firms receiving government backing to strengthen India’s semiconductor ecosystem. Other approved projects include:
- Tata Electronics: Setting up a semiconductor fab in Dholera, Gujarat, and an OSAT unit in Morigaon, Assam.
- CG Power: Establishing a semiconductor unit in Sanand, Gujarat.
- Micron Technology: Approved for a $2.75 billion assembly and test facility in Gujarat.
- Suchi Semicon: Also approved under ISM.
Surging Domestic Demand and Future Potential
India’s semiconductor demand is projected to grow from 100–110 billion by 2030, as per MeitY Secretary S. Krishnan. The government is considering ISM 2.0 to further boost domestic production.
An Inc42 report estimates the Indian semiconductor market to become a $150 billion opportunity by 2030, driven by:
- Expanding electronics manufacturing
- 5G and IoT adoption
- EV and industrial automation growth
Krishnan emphasized that India must ensure global-quality production to meet domestic needs and compete in exports.
Conclusion
Kaynes Semicon’s imminent delivery of India’s first packaged semiconductor chip signifies a major leap in the country’s semiconductor ambitions. With strong government support, strategic partnerships, and surging demand, India is steadily advancing toward self-reliance in chip manufacturing.
The success of Kaynes, Tata, Micron, and CG Power will determine whether India can transition from a semiconductor importer to a global hub for chip production. Ensuring high-quality standards, scalability, and cost competitiveness will be critical in achieving this vision.
Sources:
https://inc42.com/buzz/kaynes-likely-to-deliver-indias-first-packaged-semiconductor-chip-by-july
The Economic Times, MeitY, Inc42, Government of India approvals.