As part of the deal, Fujitsu will transfer its power modules business to L&T Semiconductor Technologies and transfer the production facilities to Kaynes Semicion

Kaynes Semicon is expected to become a new key player in the power electronics supply chain following the deal, which will likely close on June 23

In September last year, the Centre approved Kaynes’ proposal to set up a semiconductor unit in Sanand in Gujarat with an initial investment of INR 3,300 Cr

Kaynes Semicon and L&T Semiconductor Technologies (LTSTC) are set to acquire the power modules business of Japan’s Fujitsu General Electronics for INR 118.32 Cr (around $13.8 Mn).

As part of the deal, Fujitsu will transfer its power modules business to LTSTC, the fabless chip company of Larsen & Toubro, and transfer the production facilities to Kaynes Semicion, a subsidiary of electronics manufacturing company Kaynes Technologies, which is setting up INR 3,300 Cr semiconductor manufacturing unit in Gujarat’s sanand.

Fujitsu is involved in developing, manufacturing, and selling electronic devices and manufacturing equipment for information and communications in the tech solution business.

In India, the Japanese tech titan houses a research facility named Fujitsu Research of India Pvt Ltd (FRIPL). The centre was set up in 2022 in Bengaluru to strengthen its R&D capabilities in AI, machine learning and quantum software.

“The company has decided to transfer the business as part of a portfolio transformation of the electronic device business in line with strengthening the company group’s business foundations,” Fujitsu said in a statement yesterday.

Meanwhile, Kaynes Semicon is set to emerge as a new major player in the power electronics supply chain following the deal, which is expected to finalise on June 23. This move will establish the Bengaluru-based company as a significant new player, according to its CEO, Raghu Panicker, as reported by ET.

Panicker stated that the company’s new OSAT (outsourced semiconductor assembly and test) facility in Sanand will kick off operations by concentrating on the global power device packaging market.

He further explained that this venture is backed by two crucial elements: a multi-million-dollar, high-volume service agreement with customer Alpha and Omega Semiconductor (AOS) and the acquisition of three power packaging lines from Fujitsu Electronics Ltd Japan.

The collaboration with AOS will involve core power devices such as IGBTs, power modules, and MOSFETs, with an anticipated annual production of approximately 670 million units. Additionally, the acquired Fujitsu technology will immediately provide the capability to produce high-reliability automotive and industrial-grade power modules, adding about 0.6 million units to their monthly production capacity.

India’s Semiconductor Ambitions

It is to be noted that Kaynes Semicon is one of the four companies building semiconductor units in the country under the India Semiconductor Mission 1.0.

In September last year, the Centre approved Kaynes’ proposal to set up a semiconductor unit in Sanand in Gujarat that will see an initial investment of INR 3,300 Cr. Once operationalised, the facility will have a capacity of 60 Lakh chips a day.

Earlier, it was reported that Kaynes Semicon is planning to deliver India’s first packaged semiconductor chip by July 2025.

Earlier this week, the Union government also approved the proposals of US-based Micron Semiconductor and IPO-bound Aequs to set up special economic zones to boost semiconductor and electronics manufacturing in the country.

These developments come amid increasing demand for Semiconductors in the country, which is being fueled by rising demand for consumer electronic devices and emerging sectors such as AI and electric vehicles.

As per MeitY secretary S Krishnan, India’s semiconductor demand is expected to reach $100-110 Bn by 2030 from the current demand of $45–50 Bn. In March, Krishnan also said that the second phase of India Semiconductor Mission is currently in the works. Semicon 2.0 will ensure that designing, manufacturing and packaging semiconductor chips move up the value chain and that made-in-India products find a ready market, he said then.

To further embolden India’s position as a semiconductor manufacturing hub, the Centre greenlit an INR 76,000 Cr incentive plan for the semiconductor industry in 2021. The move widely interpreted as a strategy to lure foreign chip giants to invest and set up operations in the country has yielded positive results so far.

US chip giant Micron Technology, which is setting up a $825 Mn semiconductor unit in Gujaratis set to roll out the first India-made chips in the first half of 2025. Taiwan’s Powerchip Semiconductor Manufacturing Corp has also joined hands with Tata Electronics to establish a semiconductor fabrication plant in Gujarat.

The likes of Microsoft, Amazon and Google have also announced billions of dollars of investment in India’s cloud computing and AI infrastructure, which is expected to further bolster demand for semiconductors in the country.