Kaynes Semicon ties up 100% of capacity with global, Indian firms

Kaynes Semicon, an outsourced semiconductor assembly and test (OSAT) player, whose facility is coming up at Sanand in Gujarat, has been amongst the first company under the Indian Semiconductor Scheme whch has  tied up 100 per cent of its capacity of around 4.6 billion chips per annum with global and Indian companies.

 

And, with more interest coming in, it is already scouting for land for a third unit to meet potential demand.   

 

Raghu Panicker, chief executive officer (CEO) of Kaynes Semicon, said: “Our capacity is getting overbooked as there is a lot of demand. Hence, we are looking for additional land now to set up a third unit. The first unit of 2.3 billion per annum is already under production with two lines (prototype paid chips have been sent to buyers for testing them out ). A second unit is under way. Our aim is to see that the first unit starts commercial production in Q1 2026 and the second unit  from Q2 of 2026.”

 

Panicker said that the company has tied up with some leading global players.

 

One big success has been with Infineon, with which it has announced a strategic tie up to develop and launch India’s first MEMS chips, a key component in next generation wearable technology. It has taken around 11 per cent of the total capacity in the first unit.   

 

Under the agreement, Infineon will provide Kaynes with the raw materials like bare dies or wafers, which Kaynes will process and package into finished chips for a commercial buyer.

 

Panicker said the other big players which have booked capacity include Alpha & Omega Semiconductor from the US, with which it has signed a five-year agreement to offtake chips.

 

This accounts for 60 per cent of its first unit’s capacity of 2.3 billion chips a year.

 

 Kaynes has also tied up with three Indian auto companies to process their chips -  which include a top notch passenger car company and two wheeler companies.   

The other player with which it has tied up for OSAT capacity and service includes Japanese giant Fujitsu, whose power module business and production line has been bought over by Kaynes with Larsen & Toubro. 

 

The production line will be shifted to India from Japan and Kaynes will take over production of the power modules. 

 

There are other Indian players too. Benguluru-based Calligo Technologies — which provides big data solutions — and startup FermionIC in the same city that is into chip design, have pacts with Kaynes.

 

Kaynes has also been talking with investors to bring them as equity partners in return for reserved capacity in the plant.

 

Company officials say talks are on with companies in the US, Europe and Taiwan.    

 

Kaynes Semicon was cleared in September 2024 by the central government under the Indian Semiconductor Scheme. It envisages an investment of ~3,300 crore with a capacity to make 6 million chips a day. It has already supplied the first paid prototype made-in-India chip for AOS this month.

 

Kaynes Semicon is a subsidiary of listed firm Kaynes Technology, an integrated electronics manufacturing company based in Mysuru.

 

It is one among the numerous OSAT companies, which include Tata Electronics, CG Power and Foxconn-HCL, among others, which have been cleared for incentives by the government. 

         

INDIA STRATEGY 

• Has tied up full capacity with global and Indian players. Some contracts are for five years
• Looking for land for a third unit to meet growing queries for OSAT services
• Two units will get into commercial production by Q1 and Q2 of 2026 respectively   
• Talks are on with users to put in equity in exchange for reserved capacity