Mitsui, Kaynes, AOI Team Up for India Chip Backend Push

• Mitsui backs India semiconductor OSAT project
• AOI Electronics to provide technical expertise
• Kaynes facility targets 2026 operations start

Mitsui & Co., Ltd has entered into a strategic business partnership with Kaynes Semicon Private Limited of India and AOI Electronics Co., Ltd. of Japan to support the development of a semiconductor back-end manufacturing operation in India.

The collaboration is intended to strengthen semiconductor supply chains and contribute to the expansion of India’s domestic chip manufacturing ecosystem as the country increases efforts to build local semiconductor capabilities.

Kaynes Semicon is developing semiconductor assembly and testing capabilities, commonly known as Outsourced Semiconductor Assembly and Test (OSAT). The initiative aligns with the Government of India’s efforts to expand manufacturing under the Make in India programme, which includes incentives and policy support aimed at encouraging semiconductor investments. The government has approved the project as part of its broader semiconductor development framework.

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Under the partnership, Mitsui will support Kaynes in launching its OSAT operations. AOI Electronics, which specializes in semiconductor back-end manufacturing, will contribute technical expertise and operational knowledge to help establish the production processes required for semiconductor assembly and testing.

Mitsui will also assist with the commercialization of products manufactured by Kaynes, supporting market access and sales activities. As part of the agreement, Mitsui has secured exclusive rights to manage the procurement of raw materials sourced by Kaynes from Japanese-affiliated companies and other suppliers outside India.

The company will also support the development of supplier partnerships in India and internationally to ensure supply chain stability during the establishment and ramp-up of the facility. The agreement also includes provisions allowing Mitsui to acquire shares in Kaynes at a later stage, enabling the possibility of expanded strategic cooperation.

Semiconductors are essential components in modern industries, including consumer electronics, automobiles, telecommunications and artificial intelligence. Many countries are seeking to strengthen domestic semiconductor manufacturing capacity and diversify supply chains to reduce dependence on limited production hubs.

Kaynes Semicon is part of Kaynes Technology India Limited, an electronic manufacturing services provider. The company received government approval to establish its OSAT facility in September 2024 and is targeting the start of operations in the second half of 2026.