The Cabinet on Monday approved the fourth outsourced semiconductor assembly and test (OSAT) plant in the country, with Kaynes SemiCon receiving the go-ahead for its chip assembly and packaging unit. This project involves an investment of Rs 3,307 crore in Sanand, Gujarat. Its Chief Executive Officer RAGHU PANICKER, who will oversee the project, talks to Surajeet Das Gupta about their plan of action. Edited excerpts:
How prepared are you to set up your OSAT plant — the fifth in India that was cleared by the Cabinet on Monday?
We are in an advanced stage and have already acquired the land in Gujarat. We have signed agreements with three global customers: Singapore-based LightSpeed Photonics, a company in the US, and another in Taiwan. For these clients, we will handle assembly, testing, and packaging in India while they provide us with imported wafers. Our focus areas are power electronics and industrial applications.
We also have agreements with technology providers who have committed to sourcing their chip requirements from India. These include AOI Electronics of Japan, Aptos Technology in Taiwan, and Globetronics Technology of Malaysia, which will also supply the wafers.
Kaynes has also partnered Mitsui & Co., which will supply all raw materials and gases needed for chip-making. Initially, these will be imported, but we plan to set up local production in India.
When do you expect the plant to begin commercial production, and what will be the total investment once everything is complete?
We will roll out the chips by March 2025, initially producing around 200 million chips per annum, with a target of reaching 1 billion chips per annum within five years. Our total investment will be around Rs 3,500 crore, with a working capital requirement of Rs 1,000 crore. Hundred per cent of our chip capacity is already tied up with global players.
We plan to pursue an initial public offering in the sixth year of operation and expect to break even within two and a half years.
How does your OSAT plant differ from other competing projects?
Our plant will focus on chips for the automotive sector and will feature a research and development centre for package design, wafer-level testing, and system-level testing — capabilities that other projects have not incorporated. As a result, the value addition from the imported wafer to the finished chip is expected to be as high as 25-30 per cent.
Where are you recruiting talent from, given that India does not have a large pool of such expertise?
We have already hired 35 people, and our leadership team will include expatriates from the Philippines, Taiwan, and Malaysia. We have also aligned ourselves with eight universities, including three Indian Institutes of Technology, and universities in Gujarat and Odisha for skill development.