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00:00 Hello and welcome to interview profit joining us today is mr. Raghupanikar of cane semicon and Banupriya Krishna of perceptives
00:07 solutions
00:09 Welcome to interview profit
00:11 So first of all just wanted to know what is the update on the OSAT project that you're planning in India, sir
00:17 So at this point in time, we are almost in the last stages of getting this approved with with the government
00:25 You know, it should be a couple of weeks away where should we should get the approval. So that's the stage it is in now
00:31 Okay
00:33 What are the plans for this facility in terms of production capacity number of assembly lines if you can give us some details about this?
00:39 Yeah, so
00:41 You know, we intend to get into know site because we are primarily a EMS company electronic manufacturing services
00:47 With the investment that has come in through an IPO
00:51 Fundraising year year and a half back, you know, we decided either to do more of EMS, which is one option
00:57 Second is to vertically integrate ourselves and get into closer to electronics that is semiconductor
01:04 Which is to do manufacturing in semiconductor hence OSAT
01:07 It augurs well with the services set up that we are doing electronic manufacturing services and outsource semiconductor assembly and test
01:16 Another area that we are going into is is bare-board PCB because these are the two components which are imported items
01:22 And these are the two components that get into EMS
01:25 hence, we are getting into semiconductor manufacturing so
01:29 the
01:31 The semiconductor manufacturing that we intend to put is almost on a 50 acre land
01:36 That necessarily means that we huge capacity to build there will be approximately around, you know, 13 to 14 manufacturing lines
01:44 Case in point is another important aspect of engineering, which is the ATE part of it
01:50 Which nobody else is thinking in India and that's where we're gonna make a difference
01:55 The full capacity of this plant which will come on a 50 acre line
02:00 Which is 13 to 14 will churn out 1 billion devices a full capacity
02:06 That's annual capacity annual capacity 1 billion devices
02:09 All right. So what is the kind of investment that will go into producing this 1 billion chips on an annual basis?
02:15 Yeah on a on a roughly basis if I look at the first five year of investment
02:22 Somewhere around, you know, five thousand crores
02:25 But then as you would know a part is born by the government central government subsidy
02:31 Part is born by the state government subsidy the remaining part. We have raised money
02:37 Through QIP and the money is available, but that doesn't mean that after five years what happens right after five years or within five years
02:45 We have to be self-sufficient
02:47 We have to invest in newer technology
02:49 we have to invest in capex after the fifth year, which means a lot of investment that will happen and
02:56 The current financials that we worked on it seems to us that will become positive in the third or three and a half years
03:03 Okay, so that means a break even when the three and a half years
03:07 are
03:08 Bhanu Priya, welcome to NTD profit. So all of the investment also requires a certain kind of manpower as well
03:15 This I think if I'm not mistaken is the first time a Semicon plant is getting set up in India
03:21 Or an OSAT plant is getting set up in India. So what is the kind of manpower that is required for such a facility?
03:26 Okay, so if we look at the India market, so we are being expertised in the designing front end
03:33 So we are already there in the market from past 30 years. So we have been doing extremely good worldwide
03:38 So, how did it all start it all started through the government?
03:42 Academy and industry came together and there was some finishing school which got into picture and we got the expertise out there
03:49 So it is in the similar model which right now we are planning to work as COE center of excellence
03:55 Which means where the government involvement will be there simultaneously
03:59 We are talking with couple of universities signing the MOUs where we can set up the center of excellence in their premises itself
04:06 Talking to like-minded industry people and we are closely working with Keynes for that
04:11 so bringing up the industries towards the universities and putting up this center of excellence where the
04:17 Engineering guys and they would be graduates in this final semester
04:23 They would be having the hands-on experience on the missions so that there would be full
04:28 fledge finished
04:30 Material when it comes to the industries
04:33 So once they are done with the courses they can get back to the industry and we can they can work full-fledged
04:38 So if you look at the current market in India in the chip designing part, we have good amount of resources available
04:45 But when it comes to manufacturing we have been not expertise holding expertise there and lot of manpower crunches there
04:52 We just to give a rough way considering the current OSAT plans which are getting into India
04:57 It is anticipated has 1 lakh job opportunities will be generated every year. So we don't have that expertise
05:04 So we are trying to build that capacity in India itself by putting up this center of excellence
05:10 Okay, so a couple of questions here. Does the center of excellence also include an R&D center also coming up?
05:16 Sorry, I might take that. So center of excellence is a unique capability that is being set up like
05:25 Bhanupriya mentioned. R&D setup is an entirely different ball game. Now when you look at R&D setup
05:31 That will be completely different. Completely part of different skill set. Now R&D centers would be very close to the manufacturing center
05:38 Which means that you need to do the process R&D. You need to do the design R&D
05:43 You need to do the AT R&D
05:45 You need to do the test R&D all that would be very closer to the manufacturing side and that's the unique
05:50 Capability that we bring in as I was talking to you. What Bhanupriya was talking was primarily on the on the skilling part of it
05:57 Skilling part. Yeah, so as far as skill is concerned
06:00 What is the ratio that you look at for setting up for say for example a Cairns?
06:05 So how much of skilled labor that you'll require or semi skilled how many people on the shop floor?
06:11 How many people may be doing much more skilled operations? So what is the ratio like something that you like to target?
06:18 We are still figuring out on the percentage wise because as I said
06:23 This is something which we are setting up for the very first time. Idaly, BITS Pilani and couple of other institutions
06:28 I've already created the faculty and they're already working there with a program of four to six months
06:33 And this is something which we are trying to do with the university so that they don't have to go to the finishing schools
06:39 By end of the day it is for the students also so that they can cut on their cost
06:43 educational cost so in this process as I told there are a couple of MOU signed with the universities and we are working through that how
06:49 Efficiently we can put into the picture and there are certain models which we are
06:53 discussing on that
06:55 So what Bhanupriya mentioned is that just taking a leave for what she said
06:59 Lot of the focus is now going on to the engineering colleges like so they have already helped us to get to two MOUs
07:07 But those are engineers. Those are skilled engineers when it gets to semi skilled
07:12 You know, we are yet to get to the NTTFs or get to the diplomas and get to the ITI
07:18 Yeah, but a rough estimate of a rough number
07:22 in a manufacturing plant
07:24 Would be somewhere around 60-40
07:27 60 to be to the diplomas NTTF and the remaining 40 to be engineers and stuff
07:32 But as she was mentioning her focus has been primarily on the engineering community
07:36 Which could be BTEC and MTEC then we get into the the diploma and all that stuff because you know
07:42 That's a little tough to go there, but we have to find an answer to that
07:45 To that end I just wanted to get one more picture in so we have seen stories of
07:52 placements not happening at engineering colleges. So what streams of
07:57 Engineering graduates can apply or who are you targeting? Are you reaching out to those places?
08:02 As I told we are reaching out to the universities here
08:07 BTEC, Diploma, the other end. So you are into say for example
08:11 Mechanical engineers, software engineers
08:14 So, yeah mechanical engineers, software engineer, electrical engineers
08:18 So all this gets into picture there
08:20 Chemical engineering because chemical engineer plays a major role here on the clean rooms aspect and all so yeah
08:25 All the sectors has been targeted simultaneously on the second level of diploma graduates. So why
08:33 Engineers are not getting placed. The major reason is skill development. So which is lacking big-time
08:38 So that's where the finishing schools are getting into picture, right?
08:40 So just to cut this down we are trying to put up the center of excellence in the university premises itself
08:47 discussion with the industries where the industries will get their trainers or the equipments and also
08:52 Simultaneously government would be helping on the skilling part of the students universities will
08:57 extend their hand in
08:59 Updating their academic courses and even perceptors will play a role in the placement simultaneously training all the students on their
09:07 upskilling soft skills and skill development
09:11 Working closely with the academy. So this is the picture which we are planning to take across
09:15 So coming to you, Mr. Panicker again
09:18 What are your customers? I have read actually you're targeting the EV space in a big way
09:25 We know India is sort of an outlier so to speak when as far as EV adoption is going because India is the only place
09:31 Where electric cars are selling more as compared to a recent EV slowdown that we have seen globally
09:37 So what are your expectations from the EV? What are you going to do for them?
09:40 Yeah, so we being a predominantly EMS
09:43 a lot of our
09:46 Supplies are towards the EV segment almost 50% of our yearly revenue are supplies to
09:53 The EV, EV and non-EV. We are big vendors to you know, the automotive OEMs
09:58 Take a name Ola. We're one of the biggest vendors there. Now when we are supplying these
10:05 Modules could be the power modules could be the battery management system could be the cluster modules could be
10:11 Lighting solutions we pretty much know we pretty much know in the ecosystem supply
10:17 What kind of a chips are going inside?
10:19 Right. So when we know the kind of chips going inside we know then what kind of a package is going inside
10:24 That can correlate to us to find out what volume is going inside from our side
10:30 You know then extrapolated to the other EMS we get a rough number of what package
10:34 Which segment and the volume that is one
10:38 Second segment is you know, we recently
10:41 announced of
10:43 of a server
10:45 Manufacturing which we are supplying it to CDAC. We got one of the biggest orders in India and we've been selected in the last
10:51 Six months of an evaluation rigorous evaluation. We'll be doing the servers for CDAC
10:56 Now if you look at servers for CDAC, even though there's a small quantity now
11:00 We are looking at what kind of packages can be done there
11:03 You know
11:04 If you look at what kind of what kind of server chip could be sourced in India
11:09 India is a very big design house. Why can't we do our own server chip?
11:14 That's the number two part of it. Number three is
11:17 Let's look at what else can be the market. Industrial is a market right now industrial as a market. I'm looking at home appliances
11:25 It's a huge market and in home appliances
11:28 There are a lot many products that we use in our kitchen which are connected with energy saving
11:33 Yeah, right. I'm using a I'm using a mixer grinder. I'm using a few other appliances
11:39 Now there are controllers that can go inside which are energy saving controllers
11:43 Now when energy saving controllers are going, we are big suppliers of those modules
11:47 To the fan market and to the home appliances market. Now when we're supplying these modules
11:52 We necessarily know what kind of a microcontroller is going. Let's take an example third example smart meter
11:58 There is a NIC module. This is a communication module in the smart meter
12:01 I pretty much know which is a microcontroller and if that is a microcontroller and if I take 10% of the market share in smart
12:08 Energy meter I then have a point to go to
12:11 The microcontroller company and say hey, I will do the OSAT in India
12:15 So, you know look at some of these unique ways of not getting into a price competition with Southeast Asia
12:21 But look at India as a market and provide those solutions with all this
12:25 I'm trying to bring the price down of the end equipment. So that's the play that we are planning to do
12:32 You're trying to bring down the price and everything. So what are you finally the last question?
12:37 What do you want to achieve from this plant?
12:40 So what is the revenue target from this plant say from year one till year five and very properly become
12:45 After the first round of funding that goes on
12:48 I'm almost in a silent period for the for the keep because Keynes
12:52 Semicon Keynes Semicon is the subsidiary of Keynes technology and you know Keynes technologies just concluded a very very good year of
12:59 Last year, so I'm not allowed to put in the numbers, but then you know, if I may stick out and say
13:05 My own vision for Keynes semiconductor is to make it a billion dollar. I got to list this
13:12 That's a good question. I got to list this into the stock market
13:17 So this is the two dream that I'm living and then necessarily like Bhanu mentioned that you know
13:21 What do we do for this for the engineering community for the students and stuff like that?
13:26 You know, we missed a mechanical engineering
13:28 There's a lead frame design mechanical engineers will come in chemical engineers come in with a lot of gases being used
13:32 So I'm sure you know, we're gonna net net create a positive effect
13:36 What happened like Bhanu mentioned 30 years before in design?
13:40 We're gonna replicate that or do it a little bit more faster in the semiconductor manufacturing. So, you know make it a billion dollar
13:48 List it and make sure that you know, we have abundance of talent in India
13:53 We rather use the talent and also export it to those countries which are aging a lot and there are not much engineering community there
14:01 And supply so that's what I would tell. All right. Thank you so much for the panicker
14:04 Thank you Bhanu Priya for the for the lovely chat all the best. Thank you. Thank you
14:08 Thank you viewers for tuning in. This is Tushar for NU Profit
14:12 You
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