Ola in talks with Mysuru-based Kaynes Semicon to make chips for its EVs

Kaynes would manufacture the chips based on Ola's design

Ola co-founder Bhavish Aggarwal is in talks with Mysuru-based Kaynes Semicon, which is setting up an outsourced semiconductor assembly and testing (OSAT) unit in Sanand in Gujarat, for the manufacturing of chips for its electric vehicles based on its own design. Kaynes would manufacture the chips by assembling and processing the imported wafers. 

Currently, EV makers have to import the chips from global chip makers like Qualcomm and Meditek. If Ola’s collaboration with Kaynes works out, it would give a big boost to the government’s “Make in India” policy, since two home-grown companies will come together to design and assemble chips for the auto sector.

Aggarwal has floated a new company called Krutrim which, valued at $1billion, is focussed on addressing India’s AI needs and will design chips for a range of Ola’s EV products.    

Kaynes is investing Rs 5,000 crore in the OSAT plant in Sanand and has roped in four global technology partners, including Globetronics of Malaysia, Aptos Tech of Taiwan, Mixx Tech in the US and AOI of Japan. The plant will have the capacity to make 1 billion chips annually. Kaynes is aiming to set up 13 chip assembly and testing lines in the next 2 years.  

The company is also in talks with customers in the Philippines and Malaysia who require chips to make microcontroller, automotive and industrial segments and who will outsource part of the assembling and processing to India. 

Kaynes is expected to get the approval for subsidy under the India Semiconductor Mission (ISM) scheme wherein the government offers 50 per cent of the cost of constructing the plant. This is apart from the subsidy from the concerned state government.

Speaking to Business Standard, Kaynes Semicon’s Chief Executive Officer Raghu Panicker, a semicon veteran, said: “Yes, we have had talks with Ola Electric and some other auto original equipment manufacturers (OEMs) in India to look at opportunities to make the chips based on their design as it is a growing market.”

However, an Ola spokesperson declined to comment on the talks.  

Kaynes Semicon is part of the listed  Kaynes Technology, a leading electronic systems design and manufacturing (ESDM) player with a range of verticals, including automotive, industrial, aerospace, medical, railways, nuclear, outer space, consumer, internet of things, IT and others. The 32-year-old company has eight manufacturing plants across the country. In FY24 the company’s net profit jumped by 96.8 per cent to hit Rs 813 crore.  

Panickar says, however, that over 90 per cent of the business will initially come from global players. In the Philippines and Malaysia most of the OEMs in the microprocessor space prefer to outsource 10-20 per cent of their work to third- party players, which is a huge opportunity for a company like Kaynes. 

Other ATMP/OSAT players are also looking at ways to serve their Indian clients. For example, 

Micron, which will import the wafer from its plants abroad will process them to make chips in its ATMP plant, which is also under construction at Sanand.

Expansion mode
 

> Kaynes sees potential in assembling and processing “Make in India’ chips for auto companies. 

> Ola’s Aggarwal is planning to design the chips needed for the company’s EVs and is looking at OSAT players to assemble them.

> Over 30-40 chips are required in electric scooters, and upto 600-700 in passenger cars