Top 5 Semiconductor Stocks In India

The growth in consumer electronics, automotive applications, and government programs for domestic semiconductor self-sufficiency is expected to boost the Indian semiconductor market to USD 100.2 billion by 2032. Artificial intelligence, 5G, the Internet of Things, and even quantum computing are emerging new growth opportunities.

The semiconductor industry in India is crucial because India imports every semiconductor it consumes from Taiwan, China, Korea, or Vietnam. India's dependence on electronic imports has accelerated the need for India's self-sufficiency. Today we will see some top 5 semiconductor stocks in India, their benefits, and risks that might benefit if this industry advances in the future.

 

Benefits of Semiconductor Industry

1. High Growth Potential- As the demand for AI technologies, EVs, smartphones, and cloud-computing services continues to rise, semiconductors will always be at the core of tech innovation.  

2. Strong Global Demand- Chips are needed in everything, from cars to medical equipment, resulting in continuous and ever-growing demand across the globe.  

3. Government Support- Numerous nations actively invest in the fabrication of semiconductors, like the US with the CHIPS Act.  

4. High-Profit Margins- Established semiconductor firms, particularly for the latest chips, have reasonable pricing and high margins, making their business very profitable.  

5. Industry Consolidation- Big players in the industry seem to enjoy mergers and acquisitions which serve to strengthen them and increase shareholder value.  

 

 

Risks of Semiconductor Industry

1. Cyclical Nature- Semiconductor demand is cyclical. Periods of boom also tend to have pronounced slowdowns or periods of oversupply immediately following them.  

2. High Capital Expenditure- Fabs (fabrication plants) are exceedingly expensive to set up and maintain.  

3. Geopolitical Risks- Tension between nations like the US and China or Taiwan has a strong influence on the industry.  

4. Rapid Technology Changes- A company looking to stay relevant in fast-paced innovation is required to constantly spend on R&D.  

5. Supply Chain Vulnerabilities- It has become clear after COVID-19 and other disruptions that semiconductor supply chains are very complicated.

 

Top 5 Semiconductor Stocks In India

Below are the key picks of the top 5 semiconductor stocks in India in 2025 based on 5 years CAGR as of 03 Dec 2024.

1. SPEL Semiconductor Ltd. 

About

SPEL Semiconductor share price is Rs.138 as of 15 Feb 2025.

SPEL Semiconductor Ltd., India's first and only semiconductor integrated circuit assembly and test facility is based in Chennai and is a subsidiary of Natronix Semiconductor Technology Pvt Ltd. The company primarily caters to the US market. It provides integrated circuit assembling, testing, and packing services, and its products find applications in mobile phones, computers, notebooks and personal digital assistants.

 

 

 

Benefits

• The electronics market and demand for chip components in India are continuously increasing and could be advantageous for SPEL.
   
• The Indian government has been encouraging semiconductor fabrication through the “Make in India” campaign.  
  
  
• Firms such as SPEL profit as the OSAT industry expands with increased demand from chip manufacturers.  
  
  
• Compared to Taiwan, China, and the US, India has lower operational and labor costs.  
  
  
• Global semiconductor corporations could partner with SPEL in providing the necessary amplifying capabilities.  
  
  

Risks

• Competing companies in the industry have set a high bar in terms of technology and production that need to be matched by scale.  
  
  
• SPEL may face some competition from foreign players with deeper financial resources.  
  
  
• There is a possibility of SPEL becoming dependent on foreign sources for crucial materials required to fabricate chips.  
  
  
• Global trade conflicts (for instance, the US and China) affect the flow of semiconductors of dominating powers.  
  
  
• Taiwan and Korea continue to invest in and build these capabilities—India is beginning to develop a competence gap, but it lies under great competition.

 

2. ASM Technologies Ltd. Share Details

About

ASM Technologies share price is Rs.1271 as of 15 Feb 2025.

ASM offers a complete set of engineering services, from product and tool design to reverse engineering, embedded software development, technical publication creation, and even engineering automation, test fixture construction, and sustenance engineering.

 

 

Benefits

• ASM Technologies Ltd is reputed in the Engineering Services domain and in Product R&D for having a global clientele base.
  
  
• The firm operates in a variety of industries such as: automotive, aerospace, semiconductor, and enterprise software which helps in mitigating business risk.
  
  
• ASM operates from India, the USA, Singapore, and the UK which helps in international branding and revenue diversification.
  
  
• ASM invests in cutting-edge technologies such as AI, IoT, and Cloud Computing to stay competitive.
  
  
• The increased adoption of digital transformation and the need for engineering services can result in long-term revenue growth.

Risks

• Competition from global IT firms and engineering service providers can severely affect prices and market share.
  
  
• Global recessions can lead to a downturn in demand for outsourced engineering services.
  
  
• Overreliance on a limited number of clients can result in revenue loss in case contracts are cancelled.
  
  
• As a global company, ASM is exposed to foreign exchange risks affecting profitability.
  
  
• New regulations, export bans or restrictions, and data protection laws may interfere with business functioning.
  
  

3. RIR Power Electronics Ltd. Share Details

About

RIR Power share price is Rs.1997 as of 15 Feb 2025.

RIR Power Electronics Ltd. manufactures Bridges, rectifiers, power modules, diodes, and thyristors are among the common semiconductor devices. The company has completed projects for the production of high-power semiconductor devices.

 

 

Benefits

• Implements modern power electronics applications for effective energy treatment.  
  
  
• Assists end users and industries in saving energy and money.  
  
  
• Used in electric vehicles, renewable energy, industrial automation, and others.  
  
  
• Strict quality assurance standards guarantee products' longevity and consistently good performance.  
  
  
• Advocates the use of green energy and helps diminish the carbon footprint. 

Risks

• Competes with numerous foreign and domestic power electronics companies that offer stiff competition.  
• Existing products can be outdated with the rapid advancement of technology.  
• Requires more availability of semiconductors and other materials for purchase.  
  
  
• Environmental and safety laws pose serious regulations which can be very expensive.  
  
  
• There are many changes and trends in the industry which can have a downfall effect on demand.   
  
  

4. Tata Elxsi Ltd. Share Details

About

Tata Elxsi share price is Rs.6174 as of 15 Feb 2025.

Tata Elxsi provides a range of services including research and strategy, electronics design, mechanical design, software development, validation, and deployment. The Suzuki Motor Corporation along with Tata Elxsi recently opened the ‘SUZUKI-TATA ELXSI Offshore Development Center’ in Pune, India.

 

 Benefits

• Since Tata Elxsi is a subsidiary of the Tata Group, it has considerable reputation, credibility, and branding in the market which helps to secure more business.  
  
  
• The company is present in many fast-growing industries such as automotive, healthcare, media, and AI solution development.    
  
  
• The focus on AI, IoT, and digital transformation ensures that Tata Elxsi remains at the forefront of competition.  
  
  
• Tata Elxsi has been able to increase revenues and profits for many years, supported by the growing worldwide demand for design and engineering services.  
  
  

Risks

• The revenues of the company are dependent on a few large clients, and if they lose a major client, their finances will be negatively affected.  
  
  
• As an IT services company, Tata Elxsi is impacted by recessions and slow economic activity in the U.S. and European countries, which are their main markets.  
  
  
• Since the company employs highly skilled engineers, the competition to retain staff drives their costs up, which reduces margins.
   
• Being a multinational firm, the company has to adhere to various regulations of different countries, which can be complex and expensive to implement.

 

5. MosChip Technologies Ltd. Share Details

About

Moschip Technologies Ltd. is involved in semiconductor and system design of Mixed Signal IP, semiconductors, Turnkey ASICs, product engineering, and IoT solutions.

 

 

(Source: Screener)

Benefits

• MosChip’s extensive experience in designing semiconductor chips, IoT solutions, and embedded systems makes it one of the key players in the booming semiconductor industry.   
  
  
• MosChip is set to benefit from the overall growth of the semiconductor industry as there is an increase in the demand for semiconductors in the automotive, telecom, and consumer products industries.   
  
  
• The company’s collaborations and acquisitions have helped it increase its market presence and technological capabilities.  

Risks

• The semiconductor industry is very cyclical. There are periods of very high demand which are followed by downturns. This could hurt MosChip's revenues.   
  
  
• The company is experiencing very fierce competition from larger semiconductor companies with a lot more resources than the company that could dampen their share of the market.   
  
  
• Relies on external suppliers for semiconductor manufacturing, and the dependence on this external supplier could lower operational efficiency through the global supply chain.  
  
  

Points to Consider

• Examine some financial performances of semiconductor company stocks as judged by revenue growth, profitability, and ratios to understand the overall financial health of the company. 

• You can also consider having a mixed portfolio that includes both memory chip companies and processor manufacturers.

• Stay updated with market trends and what is going on worldwide with the semiconductor industry. To make better investing selections, keep an eye on developing technology, shifting geopolitical realities, and changes in the sector.

 

 

Conclusion

The semiconductor industry of India is catching up with the race of other countries like China. The government support and the growing demand for advanced technology have accelerated the growth of the industry. Investing in the best semiconductor stocks in 2025 can be a good option, but one has to look at their financial performance and trends in the market. Diversification of investment would reduce risks while improving returns.

 

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Disclaimer: Not a buy or sell recommendation. No investment or trading advice is given. This blog is only for information purposes. Always discuss with an eligible financial advisor before investing.