With the Telangana government, Kaynes Technology India Ltd. has signed an agreement to invest Rs 2,800 crore in the building of a semiconductor plant there.

In its exchange filing, the organization stated that it has “entered into an MoU with the Government of Telangana for the establishment of Outsourced Semiconductor Assembly and Testing (OSAT) and Compound Semiconductor manufacturing facility in the State.”

According to the statement, the new facility will be built in Kongara Kalan, close to Foxconn’s upcoming electronics manufacturing site.

According to the filing, the proposed investment is expected to result in approximately 2,000 people having direct employment.

The CFO of Kaynes Technology predicts a three-year revenue growth rate of above 30%.

To announce the establishment of the facility in the state, K T Rama Rao, Minister of ITE&C and Industries, met with Kaynes Chairperson Savitha Ramesh and Managing Director Ramesh Kunhikannan.

“We have been honored to collaborate with the Telangana government on the famous OSAT/ATMP plant in Hyderabad. Team Telangana worked at a remarkable and unsurpassed speed, according to Kunhikannan.

Telangana now joins the elite group of desired international locations that house the semiconductor industry, according to Minister Rama Rao, who described it as a proud moment for the state.

“Recent investments from global leaders such as Foxconn and Corning have reinforced Telangana as the preferred destination for electronics manufacturing,” he said on X.

The step-down subsidiaries of the electronics contract manufacturer previously entered into an MoU with the Karnataka government for Rs 3,750 crore to establish a semiconductor assembly and testing facility and a printed circuit board manufacturing unit.

Given that only 0.2% of India’s demand is locally produced, semiconductor production is essential for the country’s economic development, according to Kunhikannan, BQ Prime.

With outsourced semiconductor manufacturing and testing facilities, India may develop alongside Taiwan, Malaysia, and China. “India is being looked at as an active and innovative player today,” said Kunhikannan.

According to Kaynes Technology, semiconductor manufacturing is essential for India’s development.

Before the announcement, Kaynes Technology Ltd. shares ended 2.34% higher at Rs 2,549.70 per share. In comparison, the benchmark NSE Nifty 50 index increased by 0.55%.