Kaynes secures nod for Rs 3,307 crore chip plant in Gujarat

Kaynes Semicon received approval for a Rs 3,307 crore semiconductor unit in Gujarat, becoming the fifth project under India’s Rs 76,000 crore incentive scheme. The unit, expected to produce 6 million chips daily and create 10,000 jobs, plans to begin production by March next year.

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Kaynes Semicon, a subsidiary of Kaynes Technology, has received the Union Cabinet’s approval for its Rs 3,307 crore outsourced semiconductor assembly and test (OSAT) unit in Sanand, Gujarat. This makes Kaynes’ chip unit the fifth project in the country to gain government approval under the Rs 76,000 crore semiconductor incentive scheme. The other approved projects include Micron’s Rs 22,516 crore ATMP project in Sanand, Tata Group-Powerchip Semiconductor’s Rs 91,000 crore semiconductor fabrication plant in Dholera, Tata’s Rs 27,000 crore ATMP unit in Assam, and CG Power’s Rs 7,600 crore ATMP unit in Sanand.

“We have always maintained that the semiconductor mission is a programme for at least ten years minimum. This is a long programme. There will be an increased outlay for sure and we will come back with the details as and when they are finalised,” said Ashwini Vaishnaw, Minister of Electronics and Information Technology. “This is a foundational industry and has a multiplier impact on other industries and job creation,” Vaishnaw added. The central government’s incentive scheme provides fiscal support of 50% of the project cost for developing the semiconductor and display manufacturing ecosystem.

Kaynes’ OSAT unit, situated on a 46-acre site, will have a capacity of 6 million chips per day, catering to various applications including industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones. The groundwork for leveling the land in Sanand has already begun, and the plant is expected to generate about 10,000 jobs—5,000 direct and 5,000 indirect.

“We have three customers aligned already, and in the next 6-8 months after construction is completed, we will start production,” said Raghu Panicker, CEO of Kaynes Semicon. The company aims to roll out its first batch of chips by March next year, primarily focusing on exports in the first year before shifting to domestic demand. Kaynes is also targeting to establish 13 chip assembly and test lines over the next 1.5-2 years, with a volume of 1 billion chips annually. The company has begun hiring, with 25 people already onboarded.

Panicker indicated that revenue contributions from the OSAT business would start materializing from FY26, with projected revenues of around Rs 3,500 crore by FY30. Kaynes Technology reported a 70% YoY increase in revenue to Rs 504 crore in the April-June quarter, driven by strong performance in the industrials and automotive sectors, while net profit rose 106% YoY to Rs 50.8 crore.