In 2023, the semiconductor industry in India was valued at US$34.3 billion, up from its 2022 valuation of US$23.2 billion. This massive growth can be attributed to the mass adoption of digitalisation in India.
Whether it is the smartphone that has become an inseparable part of the human race, the computers that run every business today, or other electronic gadgets making life easier, they all require semiconductors. Electronic chips and microprocessors are mainly categorised as semiconductors, and companies manufacturing or dealing in them can be referred to as semiconductor companies/stocks.
Let’s understand the semiconductor industry and it plays crucial roles in the digitalisation process, technology, and electronics industry.
What’s Happening?
The recent development in the chip-making industry seems to be a big boost for the overall industry and its investors. According to Business Standard, Minister of Electronics and IT, Rajeev Chandrasekhar, said that two fully functional semiconductor fabrication plants are coming up in the country soon, which will bring multi-billion dollar investments and boost the supporting businesses such as packaging units, chip assembling business units, and similar others. Both semiconductor fabrication plants will primarily manufacture 65, 40, and 28-nanometer technology.
Tata Group has proposed an $8 billion investment for one of the plants supposed to be built at Dholera and is in talks with a Taiwanese company for partnership.
Apart from these, the cabinet approved the initial pact signed on November 21, 2023, between the EU and India to enhance and improve cooperation in the semiconductor space, as reported by the ET Government.
What’s in for the Investors?
The market in India for smartphones, laptops, and other electronics is tremendous. Moreover, 99.2% of the cell phones used in the country are currently being produced domestically, as per the Economic Times, as reported in November 2023. This suggests the tremendous opportunity that lies in this sector and is yet to be untapped.
Here are five semiconductor companies/stocks, which are game-changers in the space:
- HCL Technologies: This tech giant has a unique standing in the semiconductor space with 24 years of solid collaborations with other semiconductor businesses, the largest team of engineers, partnership with six out of the top ten OEMs, and over $10 million investments across their customer labs, solutions frameworks, and clean rooms. In 2023, the total revenue of this firm grew by 18.56% while its profit grew by close to 10%. (Data as of February 20, 2024)
- Bharat Electronics: This electronics giant entered the semiconductor business in recent years. However, it produces more than 400 electronic products for defence systems and equipment, where semiconductors are indispensable. The company captured one of the highest market shares in the industry in the few years of its invading the semiconductor space. In 2023, its profits also skyrocketed by 24.4% with an increase of 15.48% in its total income. (Data as of February 20, 2024)
- C G Power and Industrial Solutions Ltd: Since semiconductors are indispensable for the development of electronic items, this electronics giant also entered the semiconductor industry at the end of 2023. It has proposed an OSAT facility in India to be built, and the budget for the same has been proposed as $791 million or Rs 6,600 crores. The profits of the firm have increased by 5.4% during the past year; however, its revenue growth is quite high at 25.65%. (Data as of February 20, 2024)
- Tata Elxsi: The growth in the semiconductor business in India is mainly driven by technology, AI-based solutions, machine learning, and similar solutions, and this is the space Tata Elxsi specialises in. As mentioned above, Tata Group has also proposed an $8 billion investment for the upcoming two fab plants. The total income of Tata Elxsi has grown by 27.95% between 2022 and 2023, while its profits increased by 37.89% during the same period. (Data as of February 20, 2024)
- Moschip Semiconductor Technologies: Going by the market cap or profit figures, this semiconductor company may seem too small in front of the giants mentioned above; however, this company is known for its innovation and power-efficient products and services. With the rise in concerns amongst people about saving power and sustainability, this business seems to have a huge market in the Indian landscape. In the past year, its revenue grew by 33.43%, which is significant growth in this industry. (Data as of February 20, 2024)
What’s Next?
As per reports, it is anticipated that the semiconductor business in India will become a $100 billion business by 2032. This number looks achievable given the enthusiasm around digitalisation, new-age technologies, remote working, new-day electronic gadgets, and a fast lifestyle.
In 2024, the global sales of semiconductors are anticipated to reach $588 billion. The AI chips will be one of the products in this space, which will drive the market in the future, as its sales are expected to reach around $400 billion by 2027.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
