Kaynes Tech Partners With Japanese Firms For Backend Chip Tech, Raw Material Supply

Kaynes Technology India Ltd. on Tuesday announced partnership with two Japanese firms to strengthen its upcoming semiconductor manufacturing operations in India. Kaynes Semicon Pvt., a wholly owned subsidiary, signed deals with AOI Electronics Co. and Mitsui & Co.

The technology collaboration with AOI Electronics, a pioneer in semiconductor back-end processes, will provide industry-leading expertise in Advanced Packaging, Panel-Level Packaging, and Wafer-Level Redistribution Layer (RDL) technologies, according to a statement.

"This collaboration positions Kaynes Semicon to deliver world-class turnkey back-end semiconductor solutions to global customers across automotive, industrial, consumer electronics, and communication sectors," it said.

The company will gain assured access to critical raw materials, including lead frames, molding compounds, die attach materials, specialty gases and semiconductor-grade chemicals, which are essential for wafer fabrication and packaging, through a strategic alliance with Mitsui, a global trading and investment company.

"This supply chain collaboration is aimed at mitigating global disruptions, ensuring resilience and reliability, and supporting the creation of a self-reliant semiconductor ecosystem in India," the statement said.

Kaynes Tech is a part of the Modi government's Electronics Manufacturing Cluster (EMC) Scheme, an initiative to build world-class infrastructure like factories, common facilities for the Electronics System Design & Manufacturing (ESDM) sector, attracting global investment, strengthening supply chains, and making India an electronics manufacturing hub.

It operates eight manufacturing facilities across Karnataka, Haryana, Himachal Pradesh, Tamil Nadu, and Uttarakhand.

Kaynes Technology's share price has fallen nearly 24% so far this month, as concerns grow over its accounting practices. Earlier this month, JPMorgan Chase & Co. and Kotak Institutional Equities flagged concerns around deterioration in its cash flows.

Kaynes' accounting treatment of two of its acquisitions was “ambiguous” and there was a "variance in cash flow statement versus asset additions", Kotak analysts including Sandeep Gupta, wrote in a Dec. 3 note. A day later, JPMorgan analysts said there were “question marks” on the company’s revenue growth.

The company then clarified explaining its compliance with key points raised by Kotak. In an analyst call, executives said there are no inconsistencies and ambiguities in its annual report.

The company has reaffirmed its revenue guidance of $1 billion by fiscal 2028 and $2 billion by financial year 2030.

Kaynes Tech share price settled 0.3% lower at Rs 4185.40 on the BSE, ahead of the news, compared to a 0.6% decline in the benchmark Sensex. The stock has a buy recommendation from 14 out of 26 analysts tracking it, according to the latest data compiled by Bloomberg.