Image Courtesy: Kaynes
Kaynes Technology, an electronics manufacturing services (EMS) provider, has secured land in Sanand, Gujarat, for the establishment of a new outsourced semiconductor assembly and test (OSAT) facility, according to sources. The company intends to invest approximately Rs 5,000 crore in this semiconductor project.
Initially, Kaynes had planned to build its chip plant in Telangana with an investment of around Rs 3,000 crore through its subsidiary, Kaynes Semicon. However, Kaynes has decided to proceed with both locations; the Gujarat facility will focus on advanced chip assembly and testing, while the Telangana unit will handle various EMS services, including printed circuit board (PCB) production.
Kaynes has also applied for the semiconductor incentive scheme under the Rs 76,000-crore program for its Gujarat project and is awaiting government approval. The strategic choice to set up the advanced facility in Gujarat is due to the region’s developed ecosystem and the presence of other significant chip projects in Sanand and Dholera.
The decision aligns with customer demand, as noted by company executives. In an earnings call for the April-June quarter, Kaynes Technology founder and managing director, Ramesh Kanan, mentioned that construction would soon begin in Gujarat and that the team for the OSAT business is being formed. Kanan expressed optimism about the OSAT business prospects for FY26.
Jairam Sampath, the company’s whole-time director and CFO, projected that the OSAT segment could generate approximately Rs 3,500 crore in revenue by FY30, with anticipated margins surpassing those of their current business. The company has established broad memorandums of understanding (MoUs) with four customers, though specific product assignments are pending plant inspections.
The company aims to establish 13 chip assembly and test lines over the next 1.5 to 2 years, with an annual production target of 1 billion chips, according to Kaynes Semicon CEO Raghu Panicker. The Telangana facility, expected to commence operations by the end of August, will initially focus on power module packaging and micro-controller units for the electric vehicle (EV) sector.
Future plans include producing legacy semiconductor packages such as quad flat no-leads (QFN) and small outline transistors (SOT), as well as substrate-based packages like Ball Grid Array (BGA), used in various electronic products.
In the April-June quarter, the company reported a 70% year-on-year revenue increase to Rs 504 crore, driven by strong performance in the industrial and automotive sectors. The company’s net profit surged 106% year-on-year to Rs 50.8 crore.
Kaynes Technology is a leading EMS provider specializing in semiconductor assembly and testing. With a focus on advanced packaging and PCB manufacturing, the company operates facilities in Gujarat and Telangana. Kaynes has seen substantial growth, with recent investments aimed at expanding its OSAT capabilities and serving automotive, industrial, and consumer electronics sectors.