India’s semiconductor industry is witnessing rapid growth as the country aims to reduce its dependence on imports and become a global hub for electronics manufacturing. With government initiatives such as the Production Linked Incentive (PLI) scheme and rising global demand for chips, investors are showing keen interest in semiconductor-related stocks. While India does not yet have large-scale chip manufacturing units like Taiwan or the U.S., several companies are actively involved in semiconductor design, assembly, testing, and equipment supply. Understanding which semiconductor stocks to watch can help investors tap into this evolving sector with high growth potential.
Top 5 Semiconductor Stocks in India to Watch
#1 Tata Elxsi Ltd
Tata Elxsi is a leading design and technology services company that plays a significant role in semiconductor design and embedded systems. The company provides solutions to global chipmakers and original equipment manufacturers (OEMs), especially in the automotive, healthcare, and communication sectors.
Its strength lies in embedded product design, software development, and system integration services. With the rise in demand for smart devices, electric vehicles (EVs), and autonomous systems, Tata Elxsi is positioned well in the semiconductor value chain.
- Strong presence in automotive electronics and connected devices
- Collaborates with global semiconductor firms for design and R&D
- Consistent revenue growth driven by technology demand
#2 Dixon Technologies (India) Ltd
Dixon Technologies is one of India’s largest electronics manufacturing services (EMS) providers. While the company does not manufacture semiconductors directly, it plays a vital role in assembling and testing electronic devices that rely heavily on chips and integrated circuits.
With the growing push for local manufacturing under the Make in India initiative, Dixon has partnered with several multinational corporations and is expanding its footprint in chip-based product assembly, such as LED TVs, smartphones, and IoT devices.
- Partnering with major brands to localize production
- Beneficiary of government PLI schemes for electronics
- Expansion into semiconductor packaging and testing segments
#3 MosChip Technologies Ltd
MosChip is among the few Indian companies directly engaged in semiconductor design and development. The company provides turnkey ASIC (Application-Specific Integrated Circuit) and IC design services to global clients. It has expertise in high-speed digital, analog, and mixed-signal design.
MosChip also supports semiconductor companies in physical design, verification, and embedded software. The firm’s expansion into Internet of Things (IoT), connectivity solutions, and edge computing has strengthened its semiconductor profile.
- Direct involvement in chip design and layout engineering
- Serves clients in networking, automotive, and industrial sectors
- Scalable business model with global customer base
#4 ASM Technologies Ltd
ASM Technologies specializes in engineering services and R&D, with a growing footprint in semiconductor services. The company supports chip design, product lifecycle management, and engineering analytics. ASM works closely with semiconductor equipment manufacturers and foundries, offering solutions like layout verification and automation testing.
As the semiconductor sector expands, companies like ASM stand to benefit from increased outsourcing of design validation and engineering support services.
- Focus on chip design verification and embedded systems
- Partnerships with global semiconductor firms
- Exposure to telecom, aerospace, and industrial automation
#5 SPEL Semiconductor Ltd
SPEL Semiconductor is India’s first and only OSAT (Outsourced Semiconductor Assembly and Test) company. It specializes in IC packaging, assembly, and testing services. Although small in size compared to global OSAT players, SPEL plays a strategic role in India’s chip ecosystem by offering essential backend services.
With increasing domestic interest in building semiconductor fabrication and assembly units, SPEL is expected to gain from demand for local packaging capabilities, especially as more fabless design startups emerge in India.
- Pioneer in semiconductor assembly and test in India
- Serves clients in automotive, telecom, and consumer electronics
- Potential growth from localization of chip supply chains
Factors Driving Growth of Semiconductor Stocks in India
Government Support and PLI Schemes
The Indian government has launched a ₹76,000 crore semiconductor incentive plan to attract investment in chip manufacturing, design, and packaging. These incentives encourage both global and domestic players to establish manufacturing units and design centers in the country.
Rising Demand from Key Industries
Industries such as smartphones, automotive, consumer electronics, telecom, and renewable energy are increasingly reliant on semiconductors. The adoption of 5G, EVs, and artificial intelligence (AI) further boosts chip demand, benefiting companies connected to the ecosystem.
Global Chip Shortage and Localization
The recent global chip shortage exposed vulnerabilities in supply chains. This has pushed countries, including India, to reduce dependence on imports by investing in local design and assembly infrastructure. Companies engaged in backend processes like testing and packaging are in a favorable position.
Growth of Fabless Startups
India is seeing a rise in fabless semiconductor startups, which design chips and outsource manufacturing to global foundries. This shift creates more opportunities for service providers in design, testing, and system integration. Stocks of companies that support fabless innovation are expected to perform well in the long run.
Risks to Consider When Investing in Semiconductor Stocks
High Capital Requirements
Setting up fabrication units or assembly lines requires significant capital investment. Smaller companies may face limitations in scaling up due to financial constraints or lack of technical expertise.
Dependence on Global Supply Chains
Many Indian semiconductor firms still rely on imported machinery, raw materials, and overseas fabrication services. Any disruption in international logistics or trade policies can affect their operations.
Technology Obsolescence
The semiconductor industry is fast-moving, with short product life cycles and rapid technological advancements. Companies must constantly invest in innovation to stay relevant and competitive.
Investing in India’s Semiconductor Future
The Indian semiconductor landscape is at a promising yet early stage. While the country still lacks major chip fabrication plants, its strength lies in design, assembly, and testing services. The top 5 semiconductor-related stocks in India Tata Elxsi, Dixon Technologies, MosChip, ASM Technologies, and SPEL Semiconductor offer exposure to different segments of the chip supply chain.
As demand for semiconductors rises and India pushes for self-reliance, these companies are expected to play a pivotal role in shaping the nation’s digital economy. Long-term investors with a keen eye on technology trends, government policy, and global demand can consider adding semiconductor stocks to their portfolios for potentially high growth returns in the coming years.