Kaynes' highly advanced semiconductor-making unit is coming up in Gujarat, not in Telangana

Hyderabad: It's official. The proposed highly advanced and sought-after outsourced semiconductor assembly and testing (OSAT) unit by homegrown electronics manufacturing services firm Kaynes Technology is not coming up in Telangana; instead, it will be established in Sanand, Gujarat.

However, Kaynes Technology had in August inaugurated an electronics manufacturing facility in Kongara Kalan in Hyderabad, close to the airport.

Breaking the news about the OSAT plant, prime minister Narendra Modi himself took to X and said, “Yet another boost to India's efforts towards becoming a hub for semiconductors. The Cabinet approves one more semiconductor unit under the India Semiconductor Mission. To be set up in Sanand, this will cater to a wide range of sectors and also give employment to several youth.”

In an exchange filing on August 23, Kaynes Tech managing director Ramesh Kunhikannan said, “The inauguration of our Hyderabad facility is a pivotal moment in our journey. This state-of-the-art plant not only enhances our manufacturing capabilities but also positions Kaynes Technology at the forefront of the electronics manufacturing industry, both in India and globally."

Kaynes Hyderabad facility would cater to industrial, automotive, medical electronics, aerospace, and telecommunications sectors, among others.

However, it appears that the opposition BRS in Telangana is not pleased with Kaynes Tech's decision to move its OSAT plant to Gujarat.

“Congratulations to Gujarat. This unit of Kaynes was announced to be setup in Telangana in October 2023. We had put in tenacious efforts to convince Kaynes to move from Karnataka to Telangana. They wanted land allotted right next to the Foxconn plant at Kongara Kalan, close to Hyderabad Airport. We got that done in less than 10 days to win them over. Now to see this news that they are moving to Gujarat is truly saddening for us who worked hard for this. This was an important investment of over 3,500 Crore in semiconductor industry which is now a huge loss to Telangana state,” said BRS working president and former IT and industries minister, K T Rama Rao.

The Union Cabinet chaired by Prime Minister Narendra Modi on Monday approved the proposal of Kaynes Semicon Pvt Ltd to set up a semiconductor unit in Sanand, Gujarat.

The proposed unit will be setup with an investment of Rs 3,300 crore. The capacity of this unit will be 60 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, telecom, mobile phones, etc.

Kaynes CEO Raghu Panicker met with A Revanth Reddy in August and reiterated his company's commitment to set up a plant at Kongara Kalan. He invited him to the inauguration on August 23. On August 23, Telangana assembly speaker Gaddam Prasad Kumar, IT minister Duddilla Shridhar Babu, and local MLA Malreddy Ranga Reddy attended the inauguration ceremony.

After signing an MoU with the Telangana government in October last year, Kaynes Technology undertook a ground-breaking ceremony in Kongara Kalan and proposed to invest Rs 2,850 crore.

It is learnt that Kaynes Telangana unit is equipped with the latest manufacturing technologies, including high-precision electronic assembly, 3D optical and artificial intelligence-enabled state-of-the-art inspection systems, and lead-free/RoHS-compliant processes.

Industry sources said as Gujarat has a developed ecosystem with other major chip projects coming up in Sanand and Dholera, Kaynes might have weighed in there to set up the most advanced OSAT unit.

Reacting sharply to KTR’s remarks, IT minsiter Sridhar Babu said opposition was spreading misinformation.

“It is imperative to correct the blatant misinformation being spread about Kaynee SemiCon's investment in Telangana. Kaynes SemiCon has unequivocally affirmed its commitment to its Hyderabad project. The company remains fully dedicated to establishing its advanced electronics manufacturing facility at Kongarkalan, with the first phase already inaugurated by me. The addition of a facility in Gujarat does not detract from their significant investment in Telangana; in fact, it increases employment capabilities,” said Sridhar Babu in a post on X.

He further said Kaynes’ commitment to Telangana remains unchanged, and employment at the Kongarkalan plant is expected to increase to 3,000. It is disheartening to see such misinformation being peddled to create confusion and hamper Telangana's achievements and growth, not just now and also in the future, he added.

“These misleading statements reflect a lack of due diligence and a clear attempt to distort the facts. The reality is that Telangana continues to attract and retain substantial investments, and Kaynes SemiCon’s ongoing commitment is a testament to this. Before launching into unfounded claims, it would be prudent for the opposition to verify their facts. Spreading misinformation not only misguides the public but also undermines genuine progress and hard work. Telangana’s advancements and investments should be acknowledged accurately, not overshadowed by baseless allegations. Congratulations to Gujarat on their new investment, but let’s ensure that accurate information prevails,” Sridhar Babu further said.