Kaynes Technology India Limited (KTIL) has announced a significant move in the semiconductor industry through its wholly-owned subsidiary, Kaynes Semicon Private Limited (KSPL). The company has entered into a collaboration agreement with US Technology International Private Limited (UST) for Outsourced Semiconductor Assembly and Test (OSAT) operations in India.

Collaboration Details

KSPL has executed a Securities Subscription and Shareholders' Agreement (SSSA) with UST on September 1, 2025. As part of this agreement, KSPL will issue Compulsorily Convertible Preference Shares (CCPS) to UST, which will be convertible into equity shares.

Key Terms of the Agreement

• KSPL will issue CCPS to UST, not exceeding 10% of the share capital as of the closing date of the SSSA.
• The conversion of CCPS into equity shares will occur in two phases:
  1. 5% of the share capital will be converted on a fully diluted basis on the closing date of the SSSA.
  2. The conversion of the remaining 5% is subject to the fulfillment of revenue-linked milestones agreed upon by both parties.

Share Allotment Details

KSPL will allot 27,778 Compulsorily Convertible Preference Shares, which will be converted as follows:

• 13,158 CCPS will be converted into 13,158 equity shares, representing 5% of the share capital on the closing date of the SSSA.
• The conversion of the remaining 14,620 CCPS is contingent on meeting the revenue-linked milestones outlined in the SSSA.

Impact on Kaynes Technology India Limited

The company has stated that this transaction will not have any impact on its management. It's worth noting that the transaction does not fall within the ambit of related party transactions.

Strategic Implications

This collaboration between KSPL and UST marks a significant step in Kaynes Technology's expansion into the OSAT sector in India. The partnership aims to leverage the strengths of both companies to capitalize on the growing semiconductor industry in the country.

The move aligns with India's push to become a global hub for semiconductor manufacturing and testing, potentially positioning Kaynes Technology and its subsidiary KSPL as key players in this rapidly evolving sector.

As the semiconductor industry continues to grow in importance, particularly in light of global supply chain challenges, this strategic collaboration could provide Kaynes Technology with a competitive edge in the OSAT market.

Kaynes Technology India Limited (Kaynes Tech) has announced its strategic move into the commercial chip manufacturing sector, with plans to commence deliveries in the fourth quarter of fiscal year 2026. This development marks a significant milestone for the company as it prepares to expand its footprint in the semiconductor industry.

Entering the Chip Manufacturing Arena

Kaynes Tech, known for its electronic manufacturing services, is gearing up for a new chapter in its business operations. The company has revealed its intentions to begin the commercial delivery of chips, signaling its entry into the highly competitive and technologically advanced semiconductor market.

Timeline for Commercial Rollout

According to the announcement, Kaynes Tech is targeting the fourth quarter of the fiscal year 2026 (Q4 FY26) for the commencement of commercial chip deliveries. This timeline suggests that the company is in the preparatory phases of this ambitious venture, likely involving significant investments in research, development, and manufacturing capabilities.

Implications for Kaynes Tech

The move into chip manufacturing and delivery represents a potentially transformative step for Kaynes Tech. By diversifying into semiconductor production, the company is positioning itself to capitalize on the growing demand for chips across various industries, including automotive, consumer electronics, and industrial applications.

Industry Context

Kaynes Tech's announcement comes at a time when the global semiconductor industry is experiencing heightened attention due to supply chain challenges and increasing demand for electronic components. The company's entry into this space could contribute to addressing the chip shortage issues that have affected multiple sectors worldwide.

Preparing for the Future

As Kaynes Tech prepares to enter the commercial chip manufacturing and delivery phase, investors and industry observers will be keenly watching the company's progress. The success of this initiative could have significant implications for Kaynes Tech's market position and financial performance in the coming years.

While specific details about the types of chips to be manufactured or the scale of production have not been disclosed, the company's move indicates a long-term commitment to expanding its technological capabilities and product offerings.

As the target date approaches, more information is expected to emerge regarding Kaynes Tech's chip manufacturing facilities, potential partnerships, and the specific markets it aims to serve with its semiconductor products.