Kaynes set to deliver India’s first packaged chip by July

Mysuru-based Kaynes Semicon could emerge the first company to produce packaged semiconductor chips in the country by July, marking a milestone for the India Semiconductor Mission 1.0.

Kaynes chief executive Raghu Panicker and a senior government official confirmed the timeline.

Panicker said the pilot line is “almost” complete while machinery and clean room facilities are on schedule for completion by early May. Qualification testing is slated for June, with the first samples to be handed over to US semiconductor firm Alpha Omega Semiconductor in July, he said.


“We had been preparing customers, technology partners, and construction plans, before the approval,” Panicker said.“The moment the approval came, we quickly started to implement it.”

Kaynes had in September last year received the cabinet’s approval to set up an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat, with a Rs 3,307-crore investment. The unit will have a capacity to produce 6.3 million chips per day.

Kaynes has secured a multi-year agreement with Alpha Omega Semiconductor to provide packaging and testing services for 12 different packages. This includes IGBT (insulated-gate bipolar transistor), IPM (intelligent power module), and power MOSFET. The company plans to deliver initial production samples in July and August for evaluation.

“We have signed a definitive multi-year agreement with them, and they will consume almost 60% of our capacity in the first phase,” Panicker told ET.

Kaynes projects revenues of multi millions over the multi-year contract.

It is one of the four firms to have received approval for chip assembly plants. The others are CG Power, Tata Electronics, and Micron. Tata Electronics is also setting up India's first wafer fabrication unit.

While Micron received the cabinet approval for its ATMP in June 2023, Tata Electronics received the cabinet approval for its OSAT and fab in February last year. CG Power also received the cabinet approval for its OSAT in February last year.

ET reported last month that Micron’s earlier deadline of making its ATMP operational in 2024 has been pushed to early 2025.

Besides Alpha Omega, Kaynes has four customers, including in Japan and the US, lined up, Panicker said, adding that its second customer will be announced soon. The firm will focus on high voltage packages for air-conditioners and satellites.

Kaynes is also expanding its footprint with a new PCB factory in Tamil Nadu and additional projects in Odisha and Madhya Pradesh. The Tamil Nadu facility will focus on bare board PCBs, marking Kaynes' entry into the state with this segment.

“We are contemplating what we should do in Odisha and in Bhopal (Madhya Pradesh),” Panicker said, indicating that these projects will also be within the semiconductor sector, but not PCB manufacturing.

The Centre will contribute 50%, or Rs 1,653.5 crore, of the investment in Kaynes chip assembly plant, with another 20% coming from the Gujarat government. The remaining 30% of the investment, which is Rs 992.1 crore, is being made by the company.

The fiscal support agreement between the company and the central government is yet to be signed, though. Kaynes raised funds in December 2023 for the same.