In 2025, semiconductor stocks are drawing massive attention as semiconductors are often called the new oil of the global economy. Tiny chips power everything from artificial intelligence and electric vehicles to 5G, consumer electronics, and defence systems. As geopolitical tensions reshape global supply chains, the value of being able to design, assemble, package, and test chips locally has skyrocketed.
If you’re an Indian investor looking to supercharge your portfolio, the key question is: Which India-listed semiconductor or chip adjacent stocks are positioned to benefit from this wave, and what risks should you keep an eye on?
This blog explores India’s semiconductor revival, spanning the push for domestic fabrication (think Tata and Micron), the shadow cast by the 1989 Mohali factory fire, and why Taiwan remains the global leader. It then zeroes in on Indian stocks that might ride the semiconductor boom-while also cautioning on potential pitfalls.
Let’s dive right in!
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India’s Semiconductor Story: From Setback to Second Chance
The Early Dream: SCL, ISRO & Defence
India’s tryst with chips began way back in the 1970s. The government set up the Semiconductor Complex Limited (SCL) in Mohali, Punjab, with high hopes. It was supposed to be the beating heart of India’s chip ecosystem-making semiconductors for space missions, defence, and industry.
But there were hurdles. Technology upgrades were slow, investments were stretched over long timelines, and the scale just wasn’t enough to compete globally. The dream flickered, but it didn’t yet catch fire.
The 1989 Mohali Fire: A Setback That Burned Bright
Just as things were beginning to take shape, tragedy struck. In 1989, a mysterious fire gutted the SCL facility. The blaze destroyed precious infrastructure, set projects back by years, and crushed India’s ambitions of becoming a chip powerhouse.
What could have been a springboard turned into a stumbling block, delaying India’s semiconductor journey by more than a decade. For years afterwards, India was left largely dependent on imports.
Pivot to Design: Playing to Our Strengths
Instead of building chips, India shifted gears in the 1990s and 2000s. With a strong pool of engineers and cost advantages, the country became the world’s design back office for semiconductors.
Global giants like Intel, Qualcomm, Broadcom, Nvidia, and ARM set up design and R&D centres in Bengaluru, Hyderabad, and Pune. Here, Indian engineers worked on chip designs, firmware, testing, and embedded systems-critical building blocks of the global value chain.
While India didn’t make the silicon wafers, it earned a reputation for designing the brains that powered them.
Why 2025 Feels Different
Fast forward to today, and the winds are shifting again. Three big forces are putting India back in the semiconductor spotlight:
- Geopolitics and “China+1”: With supply chains disrupted and countries wary of depending too much on China, India is emerging as a natural alternative.
- Government Push: Initiatives like the PLI scheme, Design Linked Incentives (DLI), and the India Semiconductor Mission (ISM) are no longer just policy papers-they’re moving into execution.
- Anchor Projects: Big names are walking the talk. Micron is setting up a massive ATMP (assembly and testing) plant in Sanand, Gujarat, and Tata Group has announced ambitious plans for fabs and packaging facilities.
Together, these factors mean India isn’t just talking semiconductors anymore-it’s building them.
Key Milestones in India’s Semiconductor Industry
- 1976: SCL established in Mohali, Punjab.
- 1989: Fire at SCL-India’s chip ambitions go up in smoke.
- 1990s-2000s: Shift to design-led growth; global chip firms set up Indian R&D hubs.
- 2022: Launch of India Semiconductor Mission and revamped PLI/ATMP schemes.
- 2024-25: Micron’s Sanand project enters cleanroom validation; Tata’s fab and packaging proposals gain momentum.
This journey shows how India’s chip story has swung from hope to heartbreak, and now to a fresh revival. 2025 could be the moment where the country turns from designing the chips of the world to also building them at home.
Top India Listed Semiconductor Companies in India 2025
A quick snapshot of India-listed semiconductor-related companies, their segments, recent financial performance, catalysts for 2025, and risk ratings:
| Company | Segment | FY24-25 Revenue Trend | 2025 Catalyst(s) | Risk Level |
| MosChip Technologies | Fabless / ASIC design & embedded design services | Strong growth: from ~₹222.8 cr in FY24 to ~₹387 cr in FY25 | Increased ASIC/SoC design contracts, GenAI+IoT focus, PLI/DLI incentives | Medium-High |
| SPEL Semiconductor | OSAT / assembly & test | Modest growth; financials not large but steady | Export demand, test services scale | Medium |
| CDIL (Continental Devices) | Discrete semis | Legacy business, limited recent growth data | Domestic demand, legacy brand revival | High |
| RIR Power Electronics | Power semiconductor components | Limited public financials, niche focus | EV/SiC/GaN demand, defence contracts | High |
| Kaynes Technology | EMS + embedded / ATMP ambitions | Growing EMS + defence electronics business | ATMP projects, embedded systems, defence orders | Medium |
| Syrma SGS | EMS + component services | Export-anchored EMS, incremental growth | EMS scale, export orders, niche assembly | Medium |
| Dixon Technologies | EMS / Consumer electronics manufacturing | Established EMS player, backward integration | Component supply, demand from consumer electronics | Medium |
| Tata Elxsi (or Sasken/ASM) | Design services with semi/auto-semi exposure | Stable design services, growth in auto-embedded design | Auto-SoC, EV/embedded design contracts | Low-Medium |
Note: These figures are indicative. You should verify final revenue and valuation data before investing.
Sources: MosChip FY25 release; Moneycontrol quarterly; SPEL Moneycontrol; CDIL CARE report; RIR Moneycontrol/ICICI Direct; Kaynes press release & investor deck; Syrma investor deck; ET (Dixon Q4 & Q1); Tejas Moneycontrol/press; HFCL ET/TOI; Tata Elxsi press; Sasken press.
Top Semiconductor Stocks in India 2025
Showcased below are some of the stocks that are closely linked to the semiconductor industry in India:
| Stock Name | Market Cap (inr) | CMP | P/E | Div. Yield (%) | ROCE |
| Dixon Technologies (India) Ltd | ₹ 1,09,023 Cr. | ₹ 18,016 | 127 | 0.04 % | 40.0 % |
| Kaynes Technology India Ltd | ₹ 47,816 Cr. | ₹ 7,133 | 151 | 0.00 % | 14.3 % |
| Tata Elxsi Ltd | ₹ 35,853 Cr. | ₹ 5,756 | 48.2 | 1.30 % | 36.3 % |
| Syrma SGS Technology Ltd | ₹ 16,227 Cr. | ₹ 843 | 80.4 | 0.18 % | 11.7 % |
| Tejas Networks Ltd | ₹ 10,437 Cr. | ₹ 591 | 59.6 | 0.42 % | 15.5 % |
| HFCL Ltd | ₹ 10,146 Cr. | ₹ 70.3 | 300 | 0.14 % | 7.55 % |
| Moschip Technologies Ltd | ₹ 4,741 Cr. | ₹ 247 | 117 | 0.00 % | 12.0 % |
| Sasken Technologies Ltd | ₹ 2,272 Cr. | ₹ 1,500 | 54.6 | 1.67 % | 7.41 % |
| RIR Power Electronics Ltd | ₹ 2,451 Cr. | ₹ 319 | 341 | 0.07 % | 12.0 % |
| Spel Semiconductor Ltd | ₹ 1,094 Cr. | ₹ 237 | – | 0.00 % | -11.5 % |
Please note that these stocks are quoted here only as examples, not suggestions. In-depth research prior to making investing decisions is a must.
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The Global Landscape in 2025: Why Taiwan Leads in the Semiconductor?
Making a chip isn’t one step, it’s a whole chain. First, companies design the chip. Then wafers are made. After that comes testing, cutting, and packaging. Finally, these chips go into phones, cars, or machines.
The U.S. is the strongest in chip design and software. South Korea is best known for memory chips. Japan makes the special tools and materials. China is big in older, cheaper chips. But Taiwan, mainly through TSMC, is the clear leader in the most advanced chips.
Why Taiwan leads
- Long experience in making chips with fewer errors
- Factories surrounded by suppliers and customers, making processes faster
- TSMC already makes most of the world’s chips, earning huge profits to reinvest
- By mid-2025, TSMC held nearly 70% of the advanced chip market
- Strong demand from AI chips and advanced packaging keeps them ahead
What this means for Indian investors
- India won’t make the most advanced 2nm chips anytime soon (too costly and time-consuming)
- Biggest opportunities lie in chip design services, electronics manufacturing, testing and packaging
- Growth will also come from specialty chips for cars, factories, and telecom
- India’s chip story is about supporting industries and demand, not competing directly with Taiwan
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India 2025: Policies, Investments, and Projects You Should Know in Semiconductors
In 2025, India is finally making big moves in the semiconductor industry. The government wants to reduce our dependence on imported chips and create jobs in the electronics sector. Let’s break this down in simple words so you can understand what’s really happening.
Government support for semiconductors
The government launched a big program called SEMICON India, with a budget of ₹76,000 crore. This money is being managed by the India Semiconductor Mission (ISM). The goal is to support companies that want to build chip factories, testing and packaging units, and chip design centers in India.
Design Linked Incentive (DLI) scheme
To encourage Indian companies and startups to design chips locally, the government started the Design Linked Incentive scheme. This gives benefits like design tools and 4-6% incentives on sales. Dozens of chip design projects have already been approved under this plan. This is important because India has strong talent in chip design, and many Indians already work for global semiconductor companies.
ATMP and OSAT projects
ATMP (Assembly, Testing, Marking, and Packaging) and OSAT (Outsourced Semiconductor Assembly and Testing) are key steps in making chips usable. Micron, a global memory company, is building a big ATMP unit in Sanand, Gujarat. By mid-2025, it reached the clean-room testing stage, which means the project is moving forward steadily.
Proposed chip fabs
Tata Electronics is working with Taiwan’s PSMC to set up a fab (a chip-making factory) in Dholera, Gujarat. This project has government approval and an investment of about ₹91,000 crore. The target is to produce nearly 50,000 wafers each month, focusing on mature technology chips used in cars, appliances, and telecom equipment.
Building the ecosystem
Apart from factories, India also needs support systems like reliable power, clean water, gases, materials, and transport. Many state governments are developing electronics manufacturing parks (ESDM parks) to provide these facilities.
Where India has an advantage right now
- Huge pool of chip design engineers working for global companies
- Strong electronics manufacturing base, especially in mobile phones
- Supportive government policies and rising local demand in autos, industrial equipment, and telecom
Challenges and risks to watch
- New chip factories take many years to build and run successfully
- India still depends on other countries for advanced tools and raw materials
- Reliable water and electricity are must-haves, and not every region is ready yet
- First-time projects may face execution issues before they reach full production
In short: India’s semiconductor journey is still in the early days, but the combination of government policy, private investments, and local talent is setting the stage for growth. For now, India’s strength will be in chip design, packaging, and electronics manufacturing, while advanced chip fabs will take more time to become a reality.
Is Including Semiconductor Stocks in Your Portfolio a Good Decision?
Semiconductors are no longer a niche-they power smartphones, electric vehicles, AI servers, medical devices, and defence equipment. As India expands its role in chip design, electronics manufacturing, and packaging (ATMP/OSAT), investors naturally wonder if adding semiconductor-linked companies can strengthen their portfolio.
Potential Benefits of Including Semiconductor Stocks in Portfolio
- Growth Exposure: Demand for chips is expected to remain strong, driven by AI, EVs, 5G, and industrial automation.
- Policy Tailwinds: India’s Production Linked Incentive (PLI) schemes and anchor projects (e.g., Micron’s Sanand plant, Tata’s fab proposals) provide long-term support.
- Diversification: Semiconductor exposure offers a way to participate in a global technology cycle that is different from traditional banking, FMCG, or energy stocks.
Things to Keep in Mind
- High Cyclicality: Chip demand can swing sharply with global economic cycles; revenue visibility can be uncertain.
- Execution Risks: India’s semiconductor ecosystem is still developing; new projects may face delays in timelines, costs, or yields.
- Not Pure-Play Yet: Most India-listed companies are either EMS providers, design service firms, or component players-not full-scale foundries. Exposure is indirect compared to Taiwan or U.S. chip majors.
Conclusion: The Road Ahead for Semiconductor Investing
If there’s one takeaway from India’s semiconductor story, it’s this: we’re still at the foundation stage, but the direction is promising. From the early setbacks of the 1980s to today’s policy-driven revival, India has gone from designing for the world to finally taking concrete steps toward building at home.
For investors, the landscape in 2025 offers both excitement and caution. On the one hand, companies in design services, electronics manufacturing, and packaging are riding strong tailwinds-global supply chain shifts, government incentives, and rising domestic demand from sectors like EVs, telecom, and industrial automation. On the other, the sector remains cyclical, capital-intensive, and full of execution challenges.
So, is including semiconductor stocks in a portfolio worth it? They can provide exposure to a fast-growing global theme and help diversify beyond traditional sectors. But given the risks, they may work best as a measured allocation within a diversified portfolio, not as an outsized bet.
As India’s semiconductor mission unfolds, one thing is clear: chips are becoming as essential to economic growth as energy or infrastructure. Watching this sector evolve will be just as fascinating as investing in it.
Disclaimer: Investments in securities market are subject to market risks. Read all the related documents carefully before investing. The securities are quoted as an example and not as a recommendation.
FAQs
Is it good to invest in semiconductors?
Potentially, yes-chips power AI, EVs, and telecom. But the sector is cyclical and capital-intensive. For most investors, a measured allocation within a diversified portfolio-preferably via design/EMS/packaging exposure-balances growth with risk. Always review disclosures, cash flows, and execution milestones first.
Who is the leader in semiconductors in India?
There’s no single “leader” yet. India’s strengths are design and electronics manufacturing. Large initiatives include Micron’s ATMP facility and Tata’s fab/packaging plans, while listed exposure often comes via EMS (e.g., Dixon, Syrma) and design services (e.g., Tata Elxsi). Foundry leadership globally remains with Taiwan.
What is the best semiconductor stock to invest in India?
“Best” depends on goals and risk tolerance. India-listed exposure is mainly chip-adjacent-design services, EMS, packaging, and power components. Build a shortlist by comparing order visibility, utilization, margins, incentive status (PLI/DLI), customer concentration, and cash flows. Consider baskets over single-name bets. This is not investment advice.
Which five semiconductor stocks could benefit from huge AI chip demand?
Direct AI chip leaders are global (e.g., Nvidia, TSMC, ASML). In India, potential indirect beneficiaries include MosChip (ASIC/design), Kaynes and Dixon (EMS/embedded), Syrma SGS (EMS/components), and Tejas Networks (networking gear). Benefits depend on contract wins, capacity, and execution-verify filings before investing.
