Kaynes Technology Acquires Land in Gujarat

Electronics manufacturing services (EMS) firm Kaynes Technology has acquired land in Sanand, Gujarat, to establish its outsourced semiconductor assembly and test (OSAT) unit.

The company plans to invest approximately Rs 5,000 crore in this chip project, marking a significant development in its semiconductor venture through its subsidiary, Kaynes Semicon.

Kaynes Technology Expansion Plans and Dual Locations:

While Kaynes is moving forward with its Gujarat project, it is not abandoning its planned unit in Telangana. The Telangana facility will still host a couple of chip assembly lines and primarily serve Kaynes’ EMS services, including PCB (printed circuit board) manufacturing. The more advanced chip assembly and test operations will be concentrated in Gujarat.

Kaynes has already submitted an application for the Rs 76,000-crore semiconductor incentive scheme for its Gujarat chip project and is awaiting government approval.

The decision to set up the advanced facility in Gujarat aligns with the state’s growing semiconductor ecosystem. Other major chip projects are also being developed in Sanand and Dholera.

Customer Demand and Market Strategy:

Executives at Kaynes have indicated that the decision to expand in Gujarat was driven by demand from potential customers. The company is also building a team and collaborating for its OSAT business, expecting positive outcomes by FY26.

The company has broad MoUs with four customers and aims to establish 13 chip assembly and test lines within the next 1.5-2 years, targeting a production volume of 1 billion chips annually.

Revenue Projections and Business Outlook:

Kaynes Technology projects that its OSAT business could generate Rs 3,500 crore in revenue by FY30, with margins expected to surpass those of its existing business.

The company plans to initially focus on power module packaging and micro-controller units for the electric vehicle (EV) and industrial segments, with further expansion into semiconductor packages like quad flat no-leads (QFN) and small outline transistors (SOT) for various applications.

Financial Performance and Order Book by Kaynes Technology:

In the April-June quarter, Kaynes Technology reported a 70% year-on-year increase in revenue, reaching Rs 504 crore, driven by strong performance in the industrial and automotive sectors. The company’s net profit rose 106% YoY to Rs 50.8 crore. As of June, Kaynes’ order book stood at Rs 5,040 crore.

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