Kaynes Semicon gets Centre's nod to set up semiconductor unit in Gujarat's Sanand

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On Monday, the Union Cabinet chaired by Prime Minister Narendra Modi approved the proposal of Kaynes Semicon Pvt Ltd to set up a semiconductor unit in Sanand, Gujarat. The facility will be set up with an investment of Rs 3,300 crore with the capacity of producing 60 lakh chips per day.

These chips will cater to a wide variety of applications, including segments like industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones, among others. Kaynes Semicon already has three customers from Singapore, Taiwan, and the Philippines on board. It was waiting for approval to come in to start the construction and manufacturing.

Last year, in October, Karnataka-based electronic system design and manufacturing solutions supplier Kaynes Technology formed Kaynes Semicon and announced the setting of up outsourced semiconductor assembly and testing (OSAT) in Telangana under the Central government’s Rs 76,000 crore semiconductor incentive scheme. Kaynes has been waiting for this sign-off from the government ever since, which had reportedly suggested it set up the unit in Sanand instead. At the same location, American chip giant Micron and Murugappa Group’s CG Power are also putting up chip assembly, testing, marking, and packaging (ATMP) units.

“About 70 percent of our OSAT will be doing advanced packaging, and that's the difference we are going to bring to India. There'll be 30–35 percent of traditional packaging. But we are starting with substrates for co-packaged optics,” said Raghu Panicker, CEO of Kaynes Semicon, in a recent interaction with Forbes India. The company has signed a memorandum of understanding with Lightspeed Photonics, a Singapore-based fabless system development company, to provide advanced packaging solutions. “In the next six to eight months, I will have my first line with them done, and my first package will be rolled out in the next six to eight months,” adds Panicker.

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Under the India Semiconductor Mission, the Union Cabinet had approved the first proposal from Micron for setting up a semiconductor unit in Sanand in June 2023. In February, three more semiconductor units were approved. Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat, and one semiconductor unit in Morigaon, Assam. CG Power is setting up one semiconductor unit in Sanand. These four units will bring an investment of almost Rs 1.5 lakh crore, and the cumulative capacity of these units is about seven crore chips per day.