Kaynes Technology shares rally 9% after Union Cabinet gives green light to semiconductor unit

Shares of Kaynes Technology on Tuesday rallied 8.5% to its day’s high of Rs 5,052.25 after the company announced that Kaynes Semicon, a wholly owned subsidiary of the company received approval from the Union Cabinet for setting up an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat.

“We wish to inform you that Union Cabinet chaired by Honourable Prime Minister of India, Shri Narendra Modi approved the proposal of Kaynes Semicon Private Limited, a wholly owned subsidiary of Kaynes Technology India Limited, to set up a semiconductor unit at Sanand, Gujarat through its press release dated 02nd September, 2024,” the company said in a filing to the exchanges.

Mysuru-based Kaynes Semicon became the fourth company in the country to receive an OSAT approval. The investment for the project is expected to be around Rs. 3,307 crore and the capacity of this unit will be 63 lakh chips per day.

The chips produced in this unit will cater to a wide variety of applications which include segments such as industrial, automotive, electric vehicles, consumer electronics, information technology telecom mobile phones, etc.

50% of the investment, which is Rs. 1,653.5 crore, will come from the Centre, 20% from the Gujarat government, which is Rs. 661.4 crore, and the rest 30% of the investment, which is Rs. 992.1 crore will be made by the company. Kaynes raised funds in December last year for the same, as reported by ET earlier.Also read: HAL shares rally 5% on Rs 26,000 crore order win boost

The programme for the development of the semiconductors and display manufacturing ecosystem in India was notified in December 2021 with a total outlay of Rs. 76,000 crores.

In June, 2023, the Union Cabinet approved the first proposal for setting up a semiconductor unit in Sanand, Gujarat. In February 2024, three more semiconductor units were approved.

Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat, and one semiconductor unit in Morigaon, Assam. CG Power is setting up one semiconductor unit in Sanand, Gujarat.

The construction of all 4 semiconductor units is progressing at a rapid pace and a robust semiconductor ecosystem is emerging near the units. These 4 units will bring an investment of almost Rs 1.5 Lakh crore. The cumulative capacity of these units is about 7 crore chips per day.

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