India’s dream of becoming a global semiconductor hub just got a major push. UST, a leading digital transformation company, and Kaynes Semicon, a subsidiary of Kaynes Technology, have announced a joint venture worth ₹3,330 crore to set up an advanced semiconductor unit in Gujarat.
The facility will be dedicated to OSAT (Outsourced Semiconductor Assembly and Testing), a critical part of the global chip supply chain. If executed successfully, it could help India reduce dependence on foreign players and carve out a stronger position in the electronics and semiconductor ecosystem.
A Big Win for Gujarat’s Emerging Tech Landscape
The project will be located in Gujarat, a state already home to several strategic technology initiatives. Over the last few years, Gujarat has positioned itself as a magnet for electronics manufacturing, attracting major global names with its industry-friendly policies and infrastructure.
The OSAT facility, according to initial plans, will provide packaging, testing, and assembly for integrated circuits — processes currently dominated by players in Taiwan, South Korea, and China. By anchoring such an advanced project, Gujarat could emerge as the beating heart of India’s semiconductor ambitions.
An industry insider summed it up well: “This move signals India’s intent to play not just as a consumer but also as a credible supplier in the global chip market. It’s not just about building factories, it’s about building capabilities.”
The Numbers That Matter
The joint venture carries an investment outlay of ₹3,330 crore. While UST will bring its global expertise in digital engineering and innovation, Kaynes Semicon will leverage its experience in electronics manufacturing and supply chain management.
Together, the companies plan to build a facility that can service a wide range of industries, from automotive and telecom to consumer electronics and healthcare devices.
The investment is also expected to generate significant employment opportunities. Estimates suggest that the project could directly and indirectly create thousands of jobs, ranging from high-skill engineering roles to manufacturing support staff.
Why OSAT Matters in the Semiconductor Chain
When people hear “semiconductors,” they usually think of chip design or wafer fabrication. But OSAT is just as crucial. Chips manufactured at fabs must be assembled, packaged, and tested before they can be integrated into consumer or industrial products.
Currently, India imports most of its packaged chips, which adds to costs and supply chain vulnerabilities. By establishing a local OSAT ecosystem, UST and Kaynes aim to reduce these risks and make India more self-reliant.
A senior executive close to the project explained: “Global disruptions in the semiconductor supply chain have shown us the dangers of over-reliance on a few countries. India needs a domestic OSAT ecosystem, and this JV is a step in that direction.”
Government Push and Global Context
This project aligns perfectly with the Government of India’s Semiconductor Mission, which seeks to attract major investments in chip design, manufacturing, and assembly. The government has already announced incentive packages worth billions of dollars to encourage global players to set up base in India.
Globally, the semiconductor industry is witnessing a realignment. With the U.S. pushing the CHIPS Act, Europe offering subsidies, and East Asian countries doubling down, India is making sure it is not left behind.
By betting on OSAT rather than jumping directly into wafer fabs, UST and Kaynes are taking a pragmatic route. Building fabs costs upwards of $10 billion and requires years of ecosystem development, but OSAT offers a quicker, cost-effective way for India to enter the chain and gradually move up the ladder.
Strategic Partnership Between UST and Kaynes
UST has deep expertise in technology services, product engineering, and digital transformation, with a global client base that spans Fortune 500 companies. Kaynes, on the other hand, has decades of experience in electronics manufacturing services (EMS).
This collaboration blends the best of both worlds: UST’s technology and innovation strength with Kaynes’ manufacturing know-how. The result could be a facility that not only meets domestic demand but also exports semiconductor solutions globally.
Future Outlook: What It Means for India
If this project achieves its goals, India could significantly cut down on its dependence on chip imports. That, in turn, will reduce costs for industries like smartphones, automotive, and defense, while also boosting exports.
Experts believe this could trigger a ripple effect, encouraging more investments in upstream and downstream areas of the semiconductor ecosystem. Training institutes, research centers, and supplier networks could emerge around the OSAT hub, creating a vibrant semiconductor cluster.
A technology analyst noted: “This is not a sprint, it’s a marathon. But what’s encouraging is that India has finally started running in the right direction.”