Kaynes Semicon Asks Foreign Chip Firms to Partner in India as Its Sanand Plant Ramps Up

Kaynes Semicon, the chip packaging arm of Kaynes Technology, is calling on foreign semiconductor companies to form joint ventures in India. Its executives say the country still lacks expertise in key packaging materials, just as output at the company's first plant in Sanand, Gujarat begins to scale.

The appeal was set out in an interview with Nikkei Asia published on 12 October and in a DigiTimes report on 13 October 2026. Together they offer an unusually frank view, from inside one of India's first operating chip plants, of what the country's semiconductor push still needs.

What Kaynes said

Chief executive Raghu Panicker told Nikkei Asia that India needs more involvement from foreign chip companies to build a full semiconductor ecosystem. Kaynes Semicon is targeting revenue of ₹3 billion (about $31 million, per Nikkei) in the fiscal year ending March 2027, and is looking at new segments such as the power industry.

DigiTimes reported that the company's executives see the biggest gap in materials: substrates, specialty chemicals and other inputs that an assembly and test plant consumes every day. Today these are largely imported. A domestic supply base would cut costs and lead times, but building one needs partners that already have the know-how.

The Sanand plant

Kaynes Semicon's outsourced semiconductor assembly and test (OSAT) unit in Sanand is a ₹3,307 crore project approved under the India Semiconductor Mission. It began commercial production this year, becoming the second chip unit in India to go operational under the mission after Micron's Sanand facility. Nikkei describes it as one of five chip assembly, packaging and testing factories that began operating in India in 2026.

An OSAT plant does not make wafers. It takes finished silicon wafers, cuts them into individual chips, mounts them in protective packages with electrical connections, and tests them before they go into products. That back-end step is where India has moved fastest, because it needs less capital than a wafer fab.

Partners already on board

Kaynes has leaned on Japanese partners from the start:

• Aoi Electronics, a Japanese back-end specialist, is helping set up production lines and brings experience in advanced packaging, including wafer-level and panel-level packaging.
• Mitsui & Co. is helping with procurement of materials.
• SEALSQ, a Swiss-listed secure-chip company, signed a term sheet in January 2026 for a joint venture with Kaynes in India focused on secure chip personalisation, with SEALSQ holding the majority stake.

Kaynes has also acquired power-module production infrastructure from Fujitsu and is building an R&D centre in Gujarat for power semiconductor packaging. That is the background to its interest in the power industry, which covers chips used in electric vehicles, renewable energy inverters and industrial drives.

Separately, the company has been seeking assembly orders from Japanese chipmakers, including automotive chip companies, and has placed sales staff in Japan.

Why it matters

India's semiconductor strategy has so far focused on attracting large plants with generous subsidies. Kaynes's message is that plants alone are not enough. Without local suppliers for materials, chemicals and equipment servicing, Indian factories remain dependent on imports and struggle to compete on cost.

The government's second phase of the mission, with a ₹1.27 trillion outlay notified in August 2026, explicitly covers equipment, materials and talent alongside fabs and packaging. Joint ventures of the kind Kaynes is proposing would be one way to use that support.

The revenue target is also a reminder of where India's chip industry stands. ₹3 billion is modest next to the parent company's overall revenue, and it shows that ramping up a new OSAT plant to full utilisation takes time and anchor customers.

Sources

• https://www.digitimes.com/news/a20261013VL201/semicon-plant-packaging-materials-electronics.html
• https://asia.nikkei.com/editor-s-picks/interview/india-s-kaynes-semicon-eyes-foreign-help-as-it-targets-31m-revenue
• https://www.tribuneindia.com/news/business/kaynes-technology-eyes-japanese-chipmakers-with-new-semiconductor-push-report/
• https://www.crnasia.com/india/news/2026/kaynes-semicon-starts-production-at-sanand-osat-facility-marking-india-s-second-chip-unit
• https://www.sahi.com/news/kaynes-tech-secures-japan-s-aoi-electronics-tech-for-3-307-cr-semiconductor-osat-unit-5226-PE1_COR
• https://thequantuminsider.com/2026/01/16/sealsq-kaynes-semicon-jv-india/
• https://www.eetimes.com/indias-kaynes-semicon-fast-tracks-power-packaging-ambitions/