Jairam Sampat, Whole-Time Director and CFO of Kaynes Technology, said, “We do believe that as part of our strategy, we must deepen our technology presence, and just being an assembler is not going to be sufficient for meeting the growth aspirations of all the stakeholders that we have in the company.”
As part of its strategy to build a stronger technological foundation, Kaynes is focusing on the establishment of its semiconductor manufacturing facility.
Sampat shared details on the ongoing process: “First, we have to get our semicon factory going. We are in the process of setting up the buildings, etc. So in the coming year, we can do the proof of concept as well as by January-March of next year, we will probably have the commercial production going.”
India’s trade deficit for November hit a record high, primarily driven by weaker exports. However, electronics exports stood out as a key exception, with the electronics manufacturing services (EMS) sector being one of the main contributors.
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Reports indicate that the Ministry of Electronics and Information Technology (MeitY) is set to seek cabinet approval for an incentive package worth ₹40,000 crore, aimed predominantly at non-semiconductor electronic components.
Sampat said, “This news has come saying that government has approved, but I think the details have to be worked out. I am sure that will come out in some time now. Basically, this is for components industry to kind of catch up with the business here in India, so that they can support all the other EMS players within the country.”
Kaynes Technology, for instance, is working on a project focused on printed circuit boards, particularly high-density PC boards and their fabrication, which could benefit from such policy measures when fully rolled out.
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As part of its strategy, the company has launched two new projects: semiconductor assembly and test (OSAT), focused on semiconductor assembly, and PC board fabrication. In addition, the company is exploring several other opportunities, though these are more focused on modules and related areas, rather than basic components.
Additionally, a recent note from Nomura suggests that the government is aiming to boost local value addition in electronic component manufacturing from the current range of 15-18% to 35-40% over the next five years, starting in April 2025.
Nomura has maintained a buy rating on Kaynes Technology with a target price of ₹6,516.
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