PCBs joined chips on the global shortage list this fortnight. One Kaynes customer booked out an entire new production line before it had even started running. Parliament, meanwhile, passed a law meant to make sure MSMEs actually get paid on time, and a second global chip designer said it is now routing supply through Assam’s Jagiroad plant.
Issue #6 covered Semicon 2.0’s Cabinet clearance and Assam’s new MSME facilitation law. This issue covers what happened once the orders and the votes started coming in.
Story 1: Kaynes’ Entire New PCB Line Sells Out Before Production Even Starts
Kaynes Technology’s board signed off Q1 FY27 results on 7 August, and the earnings call the next day carried a striking line from Executive Vice Chairman Ramesh Kunhikannan: the company’s entire new PCB capacity has already been claimed by one global customer, whose trials are running in the Kaynes factory now, vendor code and all.
Managing Director Muthukumar Narayanaswamy explained why on the same call:
- PCB order-booking, once a matter of weeks, now takes six to eight months
- Suppliers want advance payment before they will even confirm a slot
- PCB prices have roughly tripled since the shortage began
- Other component prices are up a more modest 10 to 12 per cent, though availability, not price, is the bigger constraint there
NDTV Profit flagged the scale of the shift:
Kaynes has put real money behind both new businesses, per the full earnings call transcript:
- Total capex so far: about ₹1,200 crore
- OSAT: roughly ₹700 crore
- PCB: roughly ₹500 crore
- Commercial revenue from both: due in the December quarter
Kunhikannan was candid with analysts: this is a difficult year for the company, not an easy one.
The MSME angle: A six-to-eight-month lead time with advance payment upfront is a term a listed company can absorb and a smaller vendor cannot. I am telling clients to price PCB and component lead time into their delivery commitments, not just their bill of materials. A supplier default further up the chain is now a real risk inside every quote, the same delivery risk our East-NE Logistics Roadmap flagged for MSMEs feeding anchor supply chains.
Story 2: India’s OSAT Capacity Sells Out as the China+1 Wave Builds
Kaynes Semicon’s Sanand line, barely into commercial production, is also fully booked. CEO Raghu Panicker told Business Standard that global buyers are choosing India because they want a supply chain not entirely dependent on one country:
- Current capacity: 2.3 billion chips a year, fully booked
- Target: expand to 8 billion chips a year
- Clients drawn in: Infineon, Fujitsu and Alpha Omega Semiconductor, among others
Surat’s Suchi Semicon tells a smaller version of the same story. Founder Shetal Mehta is investing ₹860 crore to expand capacity tenfold, from 300,000 to 3 million chips a day, and that expanded line is already fully booked by foreign buyers.
The ambition behind it, per the same report:
- MeitY wants India to hold 10 per cent of the global OSAT/ATMP market by 2030
- That target is worth an estimated $55-70 billion
- China currently holds more than 35 per cent of the same market
- Chinese costs run 10 to 30 per cent lower on sheer scale
This is a long chase rather than a sprint finish. Our Semiconductor Packaging Clusters report flagged this exact gap: India has an assembly and test story now, but the materials, chemicals and equipment layer beneath it stays almost entirely imported.
The MSME angle: Subsidy money still goes to anchor-scale investors, not to MSMEs directly. Our subsidy calculator research found the same gap in ECMS, whose investment floor runs well above typical MSME scale. The real opportunity is one layer down, supplying chemicals, calibration services, logistics and facility maintenance to these plants, and that is exactly what our Vendor Readiness Assessment work is built to test for.
Story 3: Tata’s Dholera Fab Explores a Chemicals Tie-Up With Entegris
Tata Electronics is in early-stage talks with Massachusetts-based Entegris for the specialty chemicals and process solutions its Dholera fab will need, according to trade press coverage this week. Entegris works one layer inside the supply chain that most coverage skips:
- Bulk chemical and gas producers supply the raw inputs
- Entegris purifies and delivers those inputs, handling critical-materials and contamination control
- Equipment makers like ASML and Applied Materials come downstream, needing those materials to arrive pure
So far, Tata’s only inked partnership in this space is a September 2025 MoU with Germany’s Merck. It covers high-purity electronic materials and gas and chemical delivery systems for the same Dholera fab, a strategic collaboration rather than a binding supply contract. Queries to both companies on the Entegris talks went unanswered at press time.
The MSME angle: No single vendor covers a fab’s materials needs, which is why Tata is stacking Merck alongside a prospective Entegris deal rather than picking one. Assam’s own Semiconductor Policy already offers a 40 per cent top-up on central capex support for this exact materials layer, and Dholera’s supplier stack is worth watching as a preview of what Jagiroad’s could eventually look like.
Story 4: Parliament Passes the MSME Bill Mandating Early Payments
The Rajya Sabha passed the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 on 3 August; the Lok Sabha followed on 7 August without debate. It now awaits presidential assent.
PRS Legislative Research’s bill tracker has the clause-by-clause detail. The core changes for clients:
- Every Central Public Sector Enterprise must route MSME invoice payments through TReDS, the RBI-regulated receivables-discounting platform, letting a supplier get paid early by discounting the invoice
- Mediation must close within 90 days
- Arbitration must start within 30 days of mediation ending, and the award must land within 90 days after that
- If a buyer’s court challenge to an award runs past six months, at least 50 per cent of the disputed amount must be released to the supplier regardless of how the appeal ends
- The Bill also drops the Act’s fixed investment and turnover thresholds, letting the Centre reset MSME classification by notification instead, so eligibility for schemes like the ones our calculator tracks can now shift without a fresh Act each time
Nationally, MSMEs have filed more than ₹55,244 crore in delayed-payment claims on the government’s Samadhaan portal since it launched. Only about ₹14,638 crore of that has actually been resolved through the Facilitation Councils.
There is a specific Assam wrinkle worth flagging. The Ministry’s own data shows Assam is one of only three states, alongside Arunachal Pradesh and Manipur, that has never notified its own Facilitation Council rules, even though a Council has technically existed for years. The new Bill hands states more room to set up additional Councils and finally write those rules, the same gap we flagged in our piece on why 68 per cent of AIDC applications fail: paper reform and working machinery are two different things.
The MSME angle: I would tell any client waiting on a CPSE payment to start asking now whether that buyer is TReDS-registered, since this Bill puts a legal floor under the wait once assent comes through. For Assam vendors, the state notifying its own Facilitation Council rules matters more than the Bill itself, since that is the machinery that actually enforces it locally. Our Factory Setup Playbook will get an update once both land.
Story 5: L&T Semiconductor Adds Its Voice to Jagiroad’s Customer List
Bengaluru-based L&T Semiconductor is shifting its own OSAT outsourcing to Tata’s Jagiroad plant. CEO Sandeep Kumar told Business Standard this week that the plant offers globally competitive pricing; roughly 30 per cent of the company’s chips are sold within India, the rest exported. It is unprompted, third-party confirmation for a plant that already carries one marquee anchor customer: Qualcomm, which tied up with Tata Electronics back in February to build its Automotive Modules at the same Jagiroad facility, for supply into both Indian and global carmaker programmes.
Separately, Assam’s ₹1,164 crore JICA-backed semiconductor MSME programme, A-SEMI, announced in the July budget, is meant to build exactly this kind of local vendor pipeline:
- Budget-announced outlay: ₹1,164 crore
- Indicative outlay per Assam’s Chief Secretary, from an earlier briefing: ₹2,272 crore
- Potential JICA financing: up to ₹1,931 crore
- Training target: over 7,500 students and 600 trainers in semiconductor skills over five years
- Technical partners: IIT Guwahati and Japanese firms including TOHO KOKI
The MSME angle: A repeat customer’s own commentary tells me more about real demand at Jagiroad than another MoU count would, since it is unprompted rather than a state announcement. A-SEMI is Assam’s attempt to make sure its own MSMEs are qualified to bid into that demand once volumes firm up; I will be tracking its rollout against our Assam Budget 2026-27 analysis as the details land.
Gear Shift is a fortnightly roundup of India’s manufacturing and industrial policy developments, with a focus on implications for MSMEs in Northeast India. Published by Nitisagar Advisory, Gurgaon.
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