Ola Eyes Partnership with Mysuru-Based Kaynes Semicon For EV Chip Production

Swarajya Staff

May 20, 2024, 01:12 PM | Updated 01:12 PM IST

A production line of EV maker BYD in Xi'an, Shaanxi. (China Daily)
A production line of EV maker BYD in Xi'an, Shaanxi. (China Daily)

Ola co-founder Bhavish Aggarwal is in discussions with Mysuru-based Kaynes Semicon to manufacture chips for its electric vehicles based on Ola's own designs, reports Business Standard.

Kaynes Technology will handle the manufacturing by assembling and processing imported wafers. The electronics contract manufacturing firm is already setting up an outsourced semiconductor assembly and testing (OSAT) unit in Sanand, Gujarat.

Currently, EV makers rely on importing chips from global manufacturers like Qualcomm and Mediatek. However, evolving customer demands for safety, performance, comfort, and utility have increased the role of software and electronics in vehicles in India. Consequently, the share of electronics (including semiconductor chips) in the vehicle bill of materials (BOM) for cars has risen by 5-10 percentage points in the last 2-3 years.

If Ola’s collaboration with Kaynes is successful, it could reduce costs and significantly support the government’s “Make in India” initiative by bringing together two home-grown companies for design and assembly.

For Ola, this deal would enhance its vertically integrated manufacturing capabilities. A vertically integrated approach has proven beneficial for global EV original equipment manufacturer (OEM), offering strong control over products, profitability, and scalability.

This was evident during the global chip shortage when vertically integrated EV OEMs could meet market demand more effectively than traditional manufacturers by adapting solutions, such as rewriting software to be compatible with available chip supplies.

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