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May 18, 2024

Ola Eyes Local Chip Manufacturing: Talks with Kaynes Semicon to Boost ‘Make in India’ Initiative

Ola Electric, led by co-founder Bhavish Aggarwal, is in advanced discussions with Mysuru-based Kaynes Semicon to manufacture chips for its electric vehicles (EVs). Kaynes Semicon is currently setting up an outsourced semiconductor assembly and testing (OSAT) unit in Sanand, Gujarat, which will be pivotal for this collaboration. The proposed partnership aims to produce chips based on Ola’s proprietary designs, marking a significant shift towards domestic manufacturing in the EV sector.

At present, EV manufacturers in India are heavily reliant on importing chips from international giants such as Qualcomm and MediaTek. These imported chips are crucial for various functions in electric vehicles, including battery management systems, motor control, and infotainment systems. The reliance on global suppliers has not only increased costs but also introduced vulnerabilities in the supply chain, especially evident during the recent global chip shortage.

If the collaboration between Ola and Kaynes Semicon materializes, it would represent a significant step forward for India’s semiconductor industry and the broader “Make in India” initiative. This partnership would involve Kaynes Semicon assembling and processing imported wafers to create the final semiconductor chips. By leveraging local expertise and resources, Ola aims to reduce dependency on foreign suppliers and enhance the resilience of its supply chain.

Bhavish Aggarwal’s strategic move aligns with the Indian government’s vision to establish the country as a global hub for semiconductor manufacturing. The “Make in India” initiative, launched in 2014, aims to encourage both multinational and domestic companies to manufacture their products within India, thereby boosting employment and fostering technological advancements. Ola’s initiative to locally source and produce semiconductor chips could potentially set a precedent for other EV manufacturers in the country.

The establishment of the OSAT unit in Sanand, Gujarat, is a critical component of this collaboration. Sanand is already an emerging automotive and manufacturing hub, providing the necessary infrastructure and support for large-scale industrial operations. Kaynes Semicon’s OSAT facility will focus on the backend processes of semiconductor production, including assembly, packaging, and testing. These processes are essential for transforming silicon wafers into functional semiconductor chips that can be integrated into EV systems.

The success of this venture could lead to several benefits for both companies and the Indian economy. For Ola, locally manufactured chips mean greater control over the supply chain, reduced production costs, and potentially faster innovation cycles. For Kaynes Semicon, this partnership offers an opportunity to scale its operations and establish itself as a key player in the semiconductor industry. Moreover, it would create numerous job opportunities and contribute to the development of a skilled workforce in the semiconductor sector.

In addition to economic benefits, this collaboration could also drive technological advancements. By working closely with a semiconductor manufacturer, Ola can ensure that the chips are tailored specifically to meet the needs of its EVs, potentially leading to improved performance and efficiency. This could give Ola a competitive edge in the rapidly growing EV market, both domestically and internationally.

In conclusion, Ola Electric’s talks with Kaynes Semicon to manufacture semiconductor chips for its electric vehicles underscore a significant step towards self-reliance and technological advancement in India’s EV sector. This collaboration not only supports the “Make in India” initiative but also promises to enhance the resilience of the supply chain, reduce costs, and drive innovation. As the world moves towards sustainable transportation solutions, such initiatives are crucial for positioning India as a global leader in the EV industry.

Jhumpa Lahiri

Jhumpa Lahiri

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