Kaynes Semicon, a wholly-owned subsidiary of electronics manufacturing services (EMS) Kaynes Technology, on Monday received the Union Cabinet’s nod for its Rs 3,307 crore outsourced semiconductor assembly and test (OSAT) unit in Sanand, Gujarat.
With this, Kaynes’ chip unit becomes the fifth such project in the country to have received the government’s approval for a semiconductor assembly and test unit under the Rs 76,000 semiconductor incentive scheme.
The other four projects are – Micron’s Rs 22,516 crore ATMP project in Sanand, Tata group-Powerchip Semiconductor (PSMC) Rs 91,000 crore semiconductor fabrication plant in Dholera, Tata’s Rs 27,000 crore ATMP unit in Assam, and CG Power’s Rs 7,600 crore ATMP unit in Sanand.
“We have always maintained that the semiconductor mission is a programme for atleast ten years minimum. This is a long programme. There will be an increased outlay for sure and we will come back with the details as in when they are finalised,” Ashwini Vaishnaw, minister of electronics and information technology said. “This is a foundational industry and has a multiplier impact on other industries and jobs creation,” Vaishnaw added.
As per the incentive scheme for development of semiconductors and display manufacturing ecosystem, the central government provides a fiscal support of 50% of the project cost.
At the 46 acre plant, Kaynes OSAT unit will have a capacity of 6 million chips per day. The chips produced in this unit will cater to a wide variety of applications which include segments such as industrial, automotive, electric vehicles, consumer electronics, telecom, mobile phones, etc.
Kaynes has already started the groundwork of leveling the land in Sanand for the chip unit. “The plant at a full blown capacity is expected to generate about 10,000 jobs – 5,000 direct and remaining indirect,” Raghu Panicker, CEO of Kaynes Semicon, told FE.
“We have three customers aligned already and in the next 6-8 months after the construction is done, we will start the production,” Panicker added.
Kaynes Semicon already has three customers from Singapore, Taiwan, and the USA on board. One of the customers that Kaynes has onboarded is Lightspeed Photonics, a Singapore-based fabless system development company. Kaynes will provide advanced packaging solutions to Lightspeed.
The company is targeting to rollout the first batch of production from the plant by March next year. It is primarily looking at the exports in the first year of commencing the operations and will later cater to domestic demand.
“The company is targeting to have 13 chip assembly and test lines over the next 1.5-2 years with a volume of 1 billion chips annually,” Panicker said, adding that the company has started on the hiring process and onboarded 25 people so far.
On the revenue opportunity from the OSAT business, Panicker said the meaningful contribution will start coming from FY26 onwards.
“By FY30, we can expect about Rs 3,500 crore revenues in this (OSAT business). And my estimate is that the margins will be better than our existing business,” Jairam Sampath, whole-time director and chief financial officer of Kaynes Technology, had said in a call with analysts recently.
In the April-June quarter, Kaynes revenue rose 70% YoY to Rs 504 crore led by strong traction in the industrials and automotive verticals. The company’s net profit rose 106% YoY to Rs 50.8 crore.
“With upcoming initiatives from Tata, Micron, Renesas, Kaynes, and others, we are gaining momentum in developing a comprehensive semiconductor ecosystem in India. This will not only support the local electronics industry but also meet the anticipated global semiconductor demand, projected to reach $1 trillion by 2030,” said Ashok Chandak, president of India Electronics and Semiconductor Association (IESA).
The government said the construction of other four semiconductor units is progressing at a rapid pace. These four units will bring an investment of almost Rs 1.5 lakh crore. The cumulative capacity of these units is about 70 million chips per day, the government said in a release.
From: financialexpress
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