India-based Kaynes Technology has signed a memorandum of understanding (MoU) with the Telangana state government to develop a new factory for outsourced semiconductor assembly and testing (OSAT) in Hyderabad, India.

The Rs28bn OSAT and compound semiconductor facility will be located in Kongara Kalan, Telangana. The site is also situated adjacent to Foxconn’s future electronics manufacturing facility.

Kaynes’ new facility will be equipped with advanced technology and machinery and is set to create direct employment for more than 2,000 people.

The project was announced by Telangana ITE&C and Industries Minister KT Rama Rao and Kaynes managing director Ramesh Kannan, among other officials.

Rao said: “Telangana is committed towards developing a semiconductor ecosystem in the state and I am delighted to welcome Kaynes’ semiconductor OSAT & compound semiconductor facility to Hyderabad.

“Telangana is emerging as the destination of choice for the semiconductor industry owing to the supporting infrastructure, proactive governance, rich R&D [research and development] ecosystem, and availability of skilled talent pool.

“The proposed investment by Kaynes will be a strategic investment for Telangana and shall further reinforce Telangana’s position as an ideal destination for hosting the semiconductor ecosystem.”

Through the investment, Kaynes Technology, under its subsidiary Kaynes Semicon, will offer OSAT services.

The subsidiary will provide its customers with different packaging types for power devices in its first three years.

In addition to this, Kaynes Semicon will team up with IIT Bombay to develop an advanced R&D centre for package research.