Mitsui & Co, Ltd has entered into a strategic business partnership with Kaynes Semicon Private Limited of India and Japan’s AOI Electronics Co, Ltd. to support the development of a semiconductor back-end manufacturing operation in India. The collaboration is designed to strengthen semiconductor supply chains and contribute to the rapid expansion of India’s domestic chip manufacturing ecosystem.
Kaynes Semicon is building capabilities in semiconductor assembly and testing, also known as Outsourced Semiconductor Assembly and Test (OSAT). The initiative aligns with India’s national push to expand its manufacturing sector under the “Make in India” program, which includes significant incentives and subsidies to accelerate semiconductor investments. The Government of India has approved the project as part of its broader semiconductor development framework.
Under the partnership, Mitsui will play a key role in supporting Kaynes as it launches its OSAT operations. AOI Electronics, Japan’s largest OSAT company, will contribute technical expertise and operational knowledge in semiconductor back-end processing, helping establish manufacturing capabilities that meet global quality and reliability standards.
Mitsui will also support the commercialization of products manufactured by Kaynes, assisting with 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 help build partnerships with suppliers both within India and internationally to ensure a stable supply chain and smooth start-up of the facility.The agreement further includes provisions that allow Mitsui to acquire shares in Kaynes at a future stage, enabling the potential for deeper strategic cooperation as the business expands.
Semiconductors have become critical components in modern economies, powering industries ranging from consumer electronics and automobiles to telecommunications and artificial intelligence. In response, many countries are working to strengthen domestic production capabilities and diversify supply chains. By supporting Kaynes’ OSAT operations, Mitsui aims to contribute to the creation of a more resilient and geographically diversified semiconductor ecosystem.
Kaynes Semicon is part of the broader Kaynes Technology India Limited group, a major provider of Electronic Manufacturing Services (EMS). 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.The project is expected to support the growth of India’s semiconductor industry while generating employment and building technical capabilities that will help underpin the country’s expanding digital economy.
