Made in India semiconductor chips are in focus. Watch out for these 5 stocks

Mint

03-07-2025

There is big news from the Indian semiconductor sector. Kaynes Semicon, a subsidiary of Kaynes Technology, is setting up an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat.
It has secured its first anchor client in the US, Alpha & Omega Semiconductor (AOS) and has developed the first Made in India prototype chip sample.
The sample will now be sent for qualification to AOS in August. It's the first company in India to reach this important milestone.
In September 2024, the government had approved five companies under the Indian Semiconductor Mission (ISM) to set up facilities to kickstart the semiconductor manufacturing ecosystem in India.
To that end, Kaynes has set up a 1,000 sq. ft. OSAT facility in Sanand CG Power and Micron Technology also have facilities there.
As per media reports, Kaynes will begin production – the commercial rollout of Made in India chips – in the first quarter of next year, i.e. 2026, after it the qualification process is complete.
It's plant has an initial capacity of 1.5 million chips per day. The company has invested about $22 crore for the same. It will invest another $22 crore to make more complex chips once the initial capacity is up and running.
Kaynes has a five-year agreement with AOS for about 60% of the initial capacity. The company is in talks with many global chip firms for OSAT. These are the likes of ST Microelectronics, Broadcom, Intel, ROHM Semiconductor, Infineon Technologies and others.
This news has once again ignited interest in Indian Semiconductor stocks.
Here are five Indian semiconductor companies you should have on your watchlist…
#1 Moschip Technologies
Moschip Technologies is a semiconductor and system design services company. The company has over two decades of experience in silicon design and embedded solutions.
The company operates across the entire chip design spectrum from concept and architecture to final silicon and system validation. It specialises in ASICs, SoCs, VLSI design and embedded software.
Over the years, Moschip has become an important part of in India's semiconductor ecosystem.
Due to the company's strong position in chip design, it was one of the early beneficiaries of the Design Linked Incentive (DLI) scheme of Indian government.
Due to this and the booming demand for semiconductors in AI and high-performance computing, the company has shown strong growth over the last few years.
Moschip Technologies Share Price – 1 Year
Source: Equitymaster
In July 2024, MosChip secured a ₹5,000 crore contract from C-DAC to design a high-performance computing (HPC) System on Chip (SoC) using 5 nm technology. The four-year engagement gave it a major leap and also includes long-term support and maintenance.
In October 2024, where the company was inducted as an AI/ML design partner in the Renesas RZ partner ecosystem. This was a big development considering Renesas' strong position in the global semiconductor ecosystem.
MosChip is currently focused on RISC-V architecture, HPC processor development, and custom IP design. While it's not into semiconductor manufacturing, its fabless design-first business model is scalable and asset-light.
#2 Tata Electronics
Tata Electronics is part of theTata Group. The company has expertise in manufacturing precision components.
It's setting up a ₹27,000 crore OSAT facility in Jagiroad, Assam. Scheduled to become operational by mid-2025, this groundbreaking plant will generate approximately 27,000 jobs, with 15,000 direct positions and an additional 12,000 indirect roles.
The company is also setting up India's first wafer fabrication (fab) unit in Dholera, Gujarat. This ambitious project will produce 50,000 wafers per month at an investment of ₹91,000 crore, and the first chips are expected by December 2026.
The Tata sees semiconductors as a strategically important sector for long-term growth. Latest media reports suggest the company has sent around two hundred employees to Taiwan for hands-on training at the plant of the company's partner Powerchip Semiconductor.
#3 Cyient
Cyient is a technology company based in Hyderabad. It has over three decades of experience in engineering and software.
The company is investing in chip design, digital engineering, and intelligent manufacturing via its new subsidiary, Cyient Semiconductors. This company is focused on end-to-end chip design, ASIC development, and embedded systems.
Cyient's competitive advantage is in its expertise across sectors like transportation, communication, energy, aerospace, and healthcare.
Cyient Share Price – 1 Year
Source: Equitymaster
The company's DET (digital, engineering & technology) business line complements its semiconductor aspirations, with a portfolio that includes design, prototyping, and system-level integration. In FY25, the DET business clocked revenues of $68.8 crore, with $37 crore in large deal wins in the year.
#4 Kaynes Technologies
Incorporated in 2008, Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company.
The company provides conceptual design, process engineering, integrated manufacturing, and life-cycle support for clients in automotive, industrial, aerospace and defence, space, nuclear, medical, railways, internet of things, IT and others.
It specialises in delivering 'build to print' and printed circuit board assemblies (PCBA) to original equipment manufacturers (OEM).
The company also offers a wide range of solutions, including smart metering technology, smart street lighting, and IoT solutions for smart consumer appliances and devices for original design manufacturers (ODM).
Kaynes Technology Share Price – 1 Year
Source: Equitymaster
The company's subsidiary Kaynes Semicon is setting up an OSAT facility which will have the capacity to produce 6 million chips per day after fully scaling up.
The chips will cater to a wide range of industries, including industrial, automotive,electric vehicles (EV), consumer durables, and telecom.
It has already formed partnerships with key players in the semiconductor ecosystem, which will help accelerate its growth.
#5 CG Power & Industrial Solutions
CG Power and Industrial Solutionshas been part of theMurugappa Groupsince 2020.
It's engaged in the design, manufacturing and marketing of products related to power generation, transmission, and distribution & rail transportation.
The company has two business divisions namely industrial systems, and power systems. The former caters to motors and drives, and railways, whereas the latter caters to power industry and is used in transformers switchgears and allied products.
CG Power and Industrial Solutions has recently entered into a joint venture with Renesas Electronics and Stars Microelectronics to establish an OSAT facility in India.
The facility is expected to manufacture 15 million chips daily and will focus on packaging, assembling, and testing semiconductor chips for various applications, including consumer electronics, automotive, industrial, and power sectors.
CG Power Share Price – 1 Year
Source: Equitymaster
To know more about the company, check outCG Power's financial factsheetand itslatest quarterly results.
Conclusion
Under Semicon 2.0, the government is doubling down on its semiconductor ambitions, aiming for a 5% share of global chip production by 2030.
Back in 2021, India announced a $10 billion incentive package to build its semiconductor ecosystem from the ground up. That money is now finally moving.
Funds are being disbursed, and five projects-across chip fabrication, OSAT, and ATMP have already been approved under the scheme. The idea is to pull in global chip players while also creating space for homegrown champions.
If things go to plan, this policy shift could open up real opportunities for investors looking atIndia's semiconductor value chain.
As policy incentives expand and chip demand rises, the companies mentioned here should benefit.
However, this is a highly complex industry filled with numerous risks. The sector is also cyclical as well as capital intensive.
Thus, investors considering investments in semiconductor stocks will have to keep their enthusiasm in check and be extremely careful.
Investors should closely track company performance, policy developments, corporate governance, along with global semiconductor trends before making any investment decisions.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated fromEquitymaster.com.