DIGITIMES Asia: Kaynes SemiCon secures India's first paying OSAT customer for advanced semiconductor packaging

TAIPEI, Aug. 30, 2024 /PRNewswire/ -- Kaynes SemiCon, a wholly owned subsidiary of Kaynes Technology, has signed a landmark memorandum of understanding (MoU) with Lightspeed Photonics, securing India's first paying customer for outsourced semiconductor assembly and test (OSAT) services, according to CEO Raghu Panicker.

According to the news report from the technology-focused media DIGITIMES Asia, the announcement was made during the inauguration of Kaynes Technology's new electronics manufacturing unit in Hyderabad, signifying a major leap forward for India's nascent semiconductor ecosystem. The collaboration will see Kaynes SemiCon provide advanced packaging solutions for Lightspeed Photonics. The MoU also highlights the high volume run at Kaynes Semicon.

"This is the first paying OSAT customer in India," Panicker said, emphasizing the importance of the agreement. "We will initially carry out sample runs and low-volume production at our proto line in Mysore/Hyderabad, before scaling up to high-volume manufacturing once our new facility is fully operational."

Lightspeed Photonics, a Singapore-based fabless system development company, specializes in integrating optical interconnects with processors to create modular compute-interconnect heterogeneous System-in-Packages (SiP) under its LightSiP brand. This technology aims to enhance server scalability by reducing data latency, footprint, and power consumption while significantly boosting data bandwidth and performance per watt.

Strategic investments and advanced packaging

The deal is particularly significant as it underscores India's entry into the high-value segment of semiconductor manufacturing—advanced packaging.

With the global semiconductor industry increasingly focusing on advanced packaging technologies such as silicon photonics, Kaynes SemiCon's foray into this space positions the company as a key player in the global supply chain. Panicker also revealed that the company has already identified and aligned the necessary equipment for the project, with installation planned at the proto line in Mysore/Hyderabad and eventually at its upcoming facility.

"We have engaged with our equipment suppliers and are set to consign the equipment at their facilities. This will allow us to start rolling out packages for Lightspeed Photonics within four to five months," he added.

The company expects final approval from the Indian government for its OSAT services to come in soon, allowing it to proceed with its plans. "Approval may come in about a week's time," he stated, underscoring that preparations are already underway to meet the stringent requirements of advanced semiconductor packaging.

Separate MoU for capacity building

In addition to the MoU with Lightspeed Photonics, Kaynes SemiCon has also signed an agreement with the VLSI Society of India for capacity building. This initiative aims to develop a skilled workforce for India's semiconductor industry by partnering with educational institutions to provide training in semiconductor manufacturing. The implementation partner for this will be Perceptives Solutions.

According to Satya Gupta, President of the VLSI Society, the intention is "to make India a world-class electronics and semiconductor product nation." Bhanupriya K, MD of Perceptives Solutions, also stressed the need to train the students in the area of semiconductor manufacturing processes.

Through this MoU, Kaynes SemiCon will open up its OSAT facility for packaging free of cost to Education Institutes aligned with the VLSI Society of India. The dual MoUs reflect Kaynes SemiCon's initiatives to support the growth of India's semiconductor industry, focusing on technological advancement and workforce development.

As the first company to secure a paying OSAT customer in India, Kaynes Semicon is positioned to contribute significantly to the future of semiconductor manufacturing in the region.

India's semiconductor ambitions

Kaynes SemiCon's dual MOUs come at a time when India is aggressively pursuing its ambitions to become a global semiconductor hub. With the government's push towards self-reliance in electronics and a US$10 billion incentive scheme to attract semiconductor manufacturing investments, the country is poised to play a larger role in the global semiconductor supply chain.

India has granted approvals for three major semiconductor projects so far, including a wafer fabrication facility and an OSAT plant by Tata Group, as well as a separate OSAT facility by Murugappa Group's CG Power and Industrial Solutions.

Meanwhile, reports suggest that CG Power has recently entered into agreements with Japan's Renesas, a leading semiconductor manufacturer, and Thailand's Stars Microelectronics, an OSAT provider, to establish an OSAT facility in India. The company plans to invest INR7,600 crore (US$1 billion) over the next five years in this venture.