As technology advances and digitalisation becomes increasingly prevalent, the demand for semiconductor products has been rising sharply.

Semiconductors, typically made of silicon, conduct electricity more effectively than insulators like glass but not as well as pure conductors such as copper or aluminium. These tiny chips, often referred to as semis, are crucial components in a broad range of products, including computers, smartphones, appliances, and medical equipment.

They are essential in various electronic devices, from cloud servers and mobile phones to automotive systems, industrial automation, and defense technologies.

Due to their strategic and economic importance, only a few countries have developed chip-manufacturing capabilities, while others are working to reduce their dependency on imports and achieve self-sufficiency.

Currently, India relies heavily on semiconductor imports, primarily from Taiwan, China, Korea, and Vietnam. With the rise of technologies like electric vehicles (EVs) and 5G network, the semiconductor industry is undergoing significant growth and transformation.

In this blog, we will delve into the leading semiconductor stocks listed on India's exchanges, discuss their key features, benefits, and the future prospects of the sector.

Top 10 Semiconductor Stocks

1. Larsen & Toubro

Market Cap: ₹4.9 lakh crore

L&T Semiconductor Technologies (LTSCT), a wholly owned subsidiary of L&T, is the first major Indian semiconductor company specialising in designing and delivering smart devices for global customers. As a fabless company, LTSCT focuses on semiconductor design rather than manufacturing.

Recently, L&T Semiconductor Technologies and IBM announced a strategic collaboration on processor technology innovations. The announcement was made at the SEMICON India 2024 event, with the partnership set to focus on designing advanced processors for sectors including automotive, energy, and industrial.

2. HCL Technologies

Market Cap: ₹4.9 lakh crore

HCL Tech has forged long-term strategic partnerships with top OEMs across the globe and has active engagement in industry forums and workgroups. It has invested more ₹10 million (₹83 crore) across 5 customer labs, 10k clean room and solution frameworks.

Their services cover the entire lifecycle of semiconductor equipment, from design and development to testing and maintenance. HCL's expertise includes developing advanced equipment for semiconductor fabrication, implementing automation solutions to streamline production processes, and providing engineering support to optimise equipment performance.

3. Bharat Electronics Limited

Market Cap: ₹2.1 lakh crore

Bharat Electronics is a leading Indian semiconductor company, renowned for its advanced electronic equipment designed for the aerospace and defence sectors. BEL plays a crucial role in India’s electronics industry, making significant contributions to its growth and advancement. Their involvement typically includes the development of advanced semiconductor-based technologies and systems that support national defense and strategic applications. 

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4. Vedanta Limited

Market Cap: ₹1.8 lakh crore

Vedanta Resources is involved in the semiconductor industry through its subsidiary, Vedanta Semiconductor. The company is focused on manufacturing high-quality semiconductor-grade materials, such as silicon wafers, which are essential for semiconductor production. Their involvement includes providing essential raw materials that are used in the production of semiconductor chips and devices.

The company intends to establish an integrated facility for display and module fabrication to serve a range of applications across small, medium, and large display segments. This initiative will enable the company to utilise the expertise of its international subsidiary, Avanstrate Inc., a leading global producer of LCD glass substrates.

5. CG Power and Industrial Solution

Market Cap: ₹1.1 lakh crore

CG Power and Industrial Solution is taking huge strides in improving the its presence in the semiconductor sector. It is currently constructing a semiconductor manufacturing facility in Gujarat. This new unit aims to address the growing demand for semiconductor components by producing advanced semiconductor devices. The facility is expected to boost local manufacturing capabilities and support various industries relying on semiconductor technology. This move aligns with broader efforts to enhance India’s semiconductor production and reduce dependence on imports.

Here’s a table summarizing the market capitalization of the companies:

Company	Market Cap
Larsen & Toubro	₹4.9 lakh crore
HCL Technologies	₹4.9 lakh crore
Bharat Electronics Limited	₹2.1 lakh crore
Vedanta Limited	₹1.8 lakh crore
CG Power and Industrial Solutions	₹1.1 lakh crore
Dixon Technologies (India)	₹77,954 crore
Hitachi Energy India	₹54,290 crore
Tata Elxsi	₹48,071 crore
Kaynes Technology India	₹34,003 crore
Moschip Technologies	₹5,190 crore

Government Initiatives To Boost India’s Semiconductor Sector

The Indian government has introduced several initiatives and policies to bolster the semiconductor industry’s growth, including the National Policy on Electronics (NPE), the production-linked incentive (PLI) scheme and India’s semiconductor mission.

National Policy on Electronics (NPE): The policy was launched on February 25, 2019 and aims to establish India as a prominent hub for Electronics System Design and Manufacturing (ESDM).

It seeks to build domestic capabilities for producing critical components like chipsets and create a conducive environment for the industry to thrive globally.

The policy includes various schemes to incentivise investments and boost electronic manufacturing, such as the PLI scheme for large-scale electronics manufacturing, IT hardware, and Scheme for Promotion of Electronics Components and Semiconductors.

India Semiconductor Mission: The Indian government has launched the SEMICON India program with an allocation of ₹76,000 crore to improve semiconductor and display manufacturing.

Key components of the program include financial support for setting up semiconductor and display fabrication facilities, funding up to 50% of project costs for display fabs, with a cap of ₹12,000 crore per fab and assistance for various semiconductor facilities including those for compound semiconductors and assembly.

Additionally, the design-linked incentive (DLI) Scheme offers financial and infrastructure support for semiconductor design development.

Production-Linked Incentive (PLI) Scheme: The PLI schemes cover 14 sectors with an outlay of ₹1.97 lakh crore. These schemes aim to attract investments, enhance manufacturing capabilities, and boost exports, thereby stimulating production, creating jobs, and fostering economic growth, especially within the MSME (Ministry of Micro, Small and Medium Enterprises) sector.

The government’s efforts have already begun to bear fruit, with several major semiconductor companies announcing investments in India. The Indian electronics and semiconductor market is expected grow at a 25% compound annual growth rate until 2028.

This growth is being driven by the demand for smaller electronic devices, the rise of the Internet of Things, and the emergence of advanced consumer products.

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