Earlier in the month, it was reported that India is planning a $11 billion fund to boost domestic semiconductor manufacturing, a move that will trigger a windfall for local electronics players, with Kaynes Technologies Ltd. being one of the beneficiaries. The company, in fact, is projecting an immediate Rs 500 crore business uptick next year.
The government's reported push to boost domestic chip manufacturing comes as semiconductor components increasingly dictate the economics of global tech.
"Fundamentally, the total cost profile of any electronic product contains these kinds of, let's say, electronic circuits which are microcircuits and called more properly known as chips," said Jairam P. Sampath of Kaynes Tech, told NDTV Profit.
"About 20 to 30% of the cost is devoted towards these. And they are not only the cost movers—obviously, eventually the cost movers become strategic movers—but they also contain technology... both cost and technology is driven by how much control you have on this particular infrastructure".
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Sampath went on to praise the government's intervention, noting that the move will shift the medium-term business profile "towards defence, aerospace, some of the high-tech industrial, some of the railways and those kind of things, IT, high-end IT and so on."
The subsidy push goes in line with Kaynes Tech's aggressive capital expenditures, including its Outsourced Semiconductor Assembly and Test (OSAT) facility.in Gujarat.
"One of the boldest moves that this company has made, much more than our existing gross block, was in investment into the OSAT facility at Sanand," he said.
"And I'm happy to tell you that this month's end it'll get inaugurated, and we have already started sample supplies from that particular plant, we have acquired three clients," he added.
The government push offers a crucial cushion for Kaynes. The company recently cut its FY26 revenue guidance to Rs 4,100 crore and faces surging working capital requirements—reaching 139 days in the third quarter—due to global war disruptions impacting inventory.
However, Sampath remains highly optimistic about the subsidy's direct impact.
"It will definitely help in terms of at least an uptick of business of close to about 500 crores next year compared to what it was if there was no push available from the government side," he stated.
"So next year we look forward to getting this business on track in terms of cash flows and in terms of profitability and in terms of overall contribution to our consolidated financials," he concluded.
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