Kaynes to keep away from fabs for now, focus on chip facility, says CEO

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Mint. “The plant is costing us ₹4,000 crore ($475 million) to set up, and this itself will take 18 to 24 months to complete fully and make it operational. Right now, we don’t have any plans to venture into a fab project, at least in the near term. We’ll start with chip manufacturing through OSATs, and then slowly see how we can scale up," he said on the inaugural day of Semicon India 2024.

On 2 September, the Centre formally approved Kaynes Semicon’s OSAT proposal. Once fully operational, the facility will produce 6 million chips per day in the next two years. This was the fifth formal approval by the ISM under the Centre’s production-linked incentive (PLI) scheme for domestic semiconductor manufacturing.

So far, the largest project is a greenfield chip fab being set up by Tata Electronics in technology partnership with Taiwan’s Powerchip Semiconductor (PSMC), which is tipped to become operational in 2026. Barring this, India has also approved US memory maker Micron’s assembly, testing, marking and packaging plant in Sanand, Gujarat in June last year. The other two projects include Tata Semiconductor Assembly and Test (TSAT) Private Limited’s OSAT facility in Assam, as well as a second OSAT plant in Gujarat by the homegrown CG Power and Japan’s Renesas.

Kaynes’ OSAT announcement has worked positively for the company. In 10 days since the announcement, the stock has risen 12% to ₹5,135 apiece. Kaynes Technology went public in November last year, listing at a 32% premium at the time.