Kaynes Technology, a leading electronics manufacturing services (EMS) firm, has secured land in Sanand, Gujarat, for its advanced outsourced semiconductor assembly and test (OSAT) facility. The company plans to invest Rs 5,000 crore into the project, a key milestone as Kaynes expands into the semiconductor assembly space through its subsidiary, Kaynes Semicon.
Initially, Kaynes had planned to set up the chip assembly unit in Telangana with a capital expenditure of around Rs 3,000 crore. However, the company has now decided to allocate the advanced chip assembly and testing operations to Gujarat, while maintaining several assembly lines in Telangana for printed circuit board (PCB) manufacturing and other EMS services.
According to company sources, this decision was driven by customer demand and Gujarat’s established semiconductor ecosystem. Major chip projects are already underway in Sanand and Dholera, making the state a strategic location for Kaynes’ expansion.
Kaynes has applied for the government’s Rs 76,000-crore semiconductor incentive scheme for the Gujarat chip project and is awaiting approval. The company’s executives noted that preparations are in progress for the OSAT business, with construction expected to begin soon. Founder and Managing Director Ramesh Kanan expressed optimism during the April-June earnings call, projecting strong growth for the OSAT business by FY26.
The Telangana unit, which spans 46 acres, is expected to become operational by August and will primarily serve the automotive electric vehicle (EV) and industrial segments. Initial operations will focus on power module packaging and micro-controller units for the EV sector. Future plans include the development of legacy semiconductor packages such as quad flat no-leads (QFN) and small outline transistors (SOT) for consumer electronics, automotive designs, and power applications. The facility will also venture into substrate-based semiconductor packages like Ball Grid Arrays (BGA).
Kaynes reported strong financial performance in the April-June quarter, with revenue rising 70% year-on-year to Rs 504 crore, driven by robust demand in the industrial and automotive sectors. Net profit surged 106% to Rs 50.8 crore. The company’s order book stood at Rs 5,040 crore as of June, and it has signed MoUs with four customers for the OSAT business, with plans to establish 13 chip assembly and test lines over the next two years, targeting a volume of 1 billion chips annually.
Chief Financial Officer Jairam Sampath anticipates that Kaynes’ OSAT business could generate Rs 3,500 crore in revenue by FY30, with margins expected to exceed the company’s current business.
