Ola Is In Talks With Mysore-Based Kaynes Tech To Manufacture Chips For EVs

Thus far, Indian firms had been looking to develop their own individual products to compete with competitors from China and elsewhere, but slowly they’re collaborating with each other to capture an even great part of the value chain.

Ola Electric is in talks with Mysore-based Kaynes Semiconductor for the manufacture of chips based on its own designs, Business Standard reports. Kaynes would manufacture the chips by assembling and processing imported wafers. Currently, EV makers such as Ola have to import the chips from global chip makers like Qualcomm and Meditek.

“Yes, we have had talks with Ola Electric and some other auto original equipment manufacturers (OEMs) in India to look at opportunities to make the chips based on the design as it is a growing market,” said Kaynes Semicon CEO Raghu Panicker. Kaynes Semicon is part of the publicly-listed Kaynes Technology. a Rs. 20,000 crore electronic systems design and manufacturing (ESDM) player. Ola didn’t comment on the report.

Kaynes Technology is one of the electronics companies that is looking to benefit from India’s recent semiconductors and manufacturing push. The company was founded in 1988 by Ramesh Kunhikannan, an electrical engineer, and had originally started off as a manufacturing enterprise. Over the years, it has evolved into becoming a player in the Electronics System Design and Manufacturing (ESDM) industry, offering end-to-end and IoT solutions across various sectors like Automotive, Industrial, Aerospace, Defence, and others. Currently, Kaynes Technology specializes in manufacturing printed circuit boards, bluetooth modules, and chipsets for industries like automobiles and aerospace. It has over 1,500 employees, and 8 plants across India.

Crucially, Kaynes Semicon is now looking to set up an out-sourced semiconductor assembly and testing (OSAT) unit in Sanand in Gujarat for semiconductor chips. The company is investing Rs. 5,000 crore into the plant, and has roped in four global technology partners, including Globetronics of Malaysia, Aptos Tech of Taiwan, Mixx Tech in the US and A0I of Japan for the initiative. The plant will have the capacity to make 1 billion chips annually. Kaynes is aiming to set up 13 chip assembly and testing lines in the next 2 years. The company is also in talks with customers in the Philippines and Malaysia who require chips and are willing to outsource the assembling and testing parts.

It would make sense for Kaynes Technology to be in Sanand — Sanand is already home to a semiconductor manufacturing plant that’s being set up by American chipmaking giant Micron. Apart from the Sanand plant, in Dholera in Gujarat, the Tata Group has partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to fabricate 28 nm semiconductor chips. In Assam, the Tata Group is setting up a semiconductor OSAT facility with an investment of Rs. 27,000 crore.

And Indian consumer-facing companies collaborating with Indian electronics manufacturers is exactly what the government had envisaged when it had set up schemes such as the PLI and semiconductor schemes to encourage manufacturing in India. India’s rival China doesn’t only own consumer-facing brands in a host of industries such as mobile phones and solar panels, but also controls the supply chains which help create these products. While Indian companies have begun creating consumer-facing brands in sectors like EVs, they often still use components from China and elsewhere to build their products. But with Indian companies now beginning to supply components to their peers, it can help unlock efficiencies — and reduce foreign dependencies — for their products.