India’s semiconductor sector is drawing strong investor attention, with CG Power, MosChip Technologies, and other domestic firms gaining sharply in recent weeks. The rally follows new manufacturing commitments, government policy support, and expectations of growing demand for locally produced chips.
CG Power’s Strategic Bet on OSAT
CG Power and Industrial Solutions has become a central player after opening India’s first full-service outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat.
The ₹7,600 crore project, managed through subsidiary CG Semi, will eventually reach production of about 15 million chips per day once both phases are complete, according to company statements reported by Moneycontrol.
Shares surged 12–14 percent over four sessions in early September, briefly touching ₹757. Investment banks have reacted positively: Morgan Stanley initiated coverage with an “Overweight” rating and a ₹799 price target, while Nomura projected a 26 percent upside in a client note carried by The Economic Times.
Yet, risks remain. Analysts noted potential supply chain challenges, particularly if U.S.-based Wolfspeed, a supplier of silicon carbide wafers, faces financial instability.
MosChip Technologies Gains on Momentum
MosChip Technologies, a Hyderabad-based fabless semiconductor design company, has seen one of the steepest rallies. The stock rose 19 percent in a single session on September 4 and posted a 42 percent weekly gain, reaching a 52-week high of ₹244.79, as reported by The Economic Times.
The surge reflects a mix of retail investor enthusiasm, strong trading volumes, and anticipation of benefits from the government’s expanded India Semiconductor Mission (ISM 2.0). Notably, institutional investors currently hold no stake in MosChip, leaving momentum driven largely by retail participation.
Market analysts caution that while sentiment is strong, volatility is likely given the stock’s sharp rise in a short period.
Kaynes Technology Prepares Chip Launch
Kaynes Technology India, through subsidiary Kaynes Semicon, is investing ₹3,300 crore in an OSAT facility also located in Gujarat. Production capacity is projected at around six million chips daily.
The company has announced that its first Made-in-India chip is expected to debut in early October 2025. In September alone, Kaynes’ stock climbed nearly 12 percent, buoyed by solid Q1 FY26 financials: revenue of ₹673 crore and net profit of ₹74.6 crore, according to Upstox reporting.
Dixon Technologies Expands Its Role
While not a direct chip manufacturer, Dixon Technologies plays a critical role in India’s semiconductor ecosystem as a leading electronics manufacturing services (EMS) provider.
The firm supports assembly for consumer and telecom devices, making it a key downstream partner. For Q1 FY26, Dixon reported revenue of ₹12,835 crore and net profit of ₹280 crore. Shares rose about 7 percent in September, demonstrating investor confidence in its strategic role.
Bharat Electronics Limited Strengthens Capabilities
State-run Bharat Electronics Limited (BEL) remains a pillar of India’s defence electronics and chip design push. In June 2025, BEL inaugurated a semiconductor fabrication facility in Pune and began co-developing integrated circuits with the Semi-Conductor Laboratory (SCL), according to industry reports.
Analysts see BEL’s progress as a long-term strategic contribution to India’s goal of reducing reliance on imported defence technology.
Policy Context and Global Backdrop
India’s push into semiconductors is framed by a wider geopolitical and economic backdrop. Countries are seeking to localise chip production amid supply chain disruptions and rising demand from sectors such as electric vehicles and defence.
The Indian government has committed billions under its semiconductor incentive programme to attract investment. Experts note that while OSAT facilities mark a key step, India still faces challenges in developing advanced fabrication plants and securing raw materials.
Outlook for Investors
Market watchers suggest the current rally is a sign of optimism but warn of high volatility, especially in smaller-cap firms like MosChip. Larger players such as CG Power and BEL may offer more stability, though they too face execution risks tied to global supply chains.
“India’s semiconductor ecosystem is clearly gaining momentum, but the market must separate long-term fundamentals from short-term excitement,” said a senior analyst at a Mumbai-based brokerage.
Conclusion
The recent surge in semiconductor-linked stocks, from CG Power to MosChip, reflects both investor optimism and India’s policy-driven ambitions to become a significant chip manufacturing hub. Whether this momentum translates into sustained industrial capability will depend on execution, supply chain resilience, and continued global demand.
