India's efforts to build a semiconductor manufacturing ecosystem have seen numerous companies enter the semiconductor packaging segment. One of them, Kaynes SemiCon, has revealed that they plan to roll out the first line of OSAT by the first week of April 2024. Speaking to Digitimes Asia recently, Raghu Panicker, CEO of Kaynes SemiCon, added that they have numerous announcements on the horizon.
"The first line for OSAT will come in the first week of April," Panicker said. "The next update you will receive from us concerns the acquisition of more technology partners. You'll soon hear about our memory technology from Taiwan, as well as our 2.5D and 3D wafer-level packaging technology from Japan. You can also expect advanced technology originating from France and Co-Packaged Optics technology from North America. All of this will be unveiled in the next couple of weeks."
The news comes after several others announced plans in the OSAT segment. Micron and Sahasra Semiconductors have already begun work on this front. The latest to show interest has been CG Power and Industrial Solutions.
Billion-dollar revenue target, IPO
Kaynes, which started as a contract manufacturer, made a remarkable entry into the public market with an exceptional IPO last year. Looking ahead, Panicker outlined the company's ambitious objectives, including a substantial revenue increase and taking its semiconductor division public.
"We have two primary goals," Panicker said. "The first began last year as part of a five-year plan to achieve $1 billion in revenue, leaving us with four years to accomplish this. We aim for Kaynes Technology to reach a billion-dollar revenue mark within the next four years. Essentially, the past year has set the foundation for this objective. We are on track, as evidenced by nearly doubling our revenue in the last two years, bolstered by a strong book-to-bill ratio."
Panicker highlighted the company's robust presence across diverse sectors as a key strength, providing stability against market fluctuations. The company's strategic collaboration with customers spans multiple industries, and its portfolio's broad base is designed for resilience.
The organizational structure features ten distinct verticals, each functioning autonomously as a profit and loss (P&L) entity rather than just in name. These verticals are empowered to oversee their budgets and financial results independently. This decentralized approach to business management is crucial to the company's expansion strategy.
"Our second goal is to develop our OSAT division under Kaynes SemiCon," Panicker continued. "Over the next six to seven years, we aim to increase its revenue to a billion dollars and prepare it for a public listing. These are two of our clear objectives. To achieve these targets, we plan to expand our team, enhance our technology partnerships, and engage with market experts and consultants."
Overcoming the talent pool challenge
Although India is known to produce engineers in the IT domain, expertise in the semiconductor manufacturing segment is relatively less. For companies like Kaynes SemiCon planning to enter this business actively, overcoming this challenge is a priority.
"The way we are circumventing this problem is by working with a couple of institutes," Panicker said. "We are running certification programs like the one currently being concluded with IIT Mumbai, which was a five-day certification program. We also plan to run a three-month program from which we will hire people. We are working with entities like ITIs and diploma colleges, creating certifications and training. For example, there's a program starting in January, purely on package design with KLE Tech, Hubli."
Panicker also notes that developing a robust ecosystem with various stakeholders will take time to materialize. He emphasizes that technology partners will play a crucial role in establishing the plant and imparting necessary training to the workforce. This collaborative effort is expected to take 1-1.5 years to become fully functional.
"Until then, we'll have to utilize what is available in India, bringing in external trainers," Panicker added. "Once you do a certain volume of a particular package, it's only a matter of incremental additions. For example, with wire bonding as a technology, we run a couple of lines. We learn from it, and then we move on to technologies like BGA, FC BGA, and eventually to 2.5D/3D packaging. It's easier said than done because these are all complex technologies, but the path is clear."
Panicker concluded by stating that the company has embarked on a journey from silicon to systems as India presents a vast market potential that negates the necessity to seek opportunities abroad. He noted that Kaynes Technology is poised for expansion and growth across various sectors, including automotive EVs, data centers, lifestyle products, medical equipment, railways, IT, and telecommunications.
