5 Semiconductor Stocks to Watch as India Rolls Out Semicon India Mission 2.0

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Jul 16, 2026 - 5 Semiconductor Stocks to Watch as India Rolls Out Semicon India Mission 2.0

5 Semiconductor Stocks to Watch as India Rolls Out Semicon India Mission 2.0

Image source: mechichi/www.istockphoto.com

Semiconductors are having a moment in India.

The Union Cabinet just green-lit ISM 2.0 on 15 July, and this time the government is putting Rs 1.27 trillion (tn) on the table, way up from ISM 1.0's Rs 760 bn.

Union Minister Ashwini Vaishnav called semiconductors a foundational industry, and honestly, he's not wrong. Everything from your phone to your fridge to your car needs a chip these days.

The twist this time is that ISM 1.0 was all about landing fab units. ISM 2.0 shifts the focus to vertical integration, meaning India wants to stop importing every little component and start building the whole ecosystem at home: equipment, speciality chemicals, raw materials, advanced packaging, the works.

The mission's lifecycle has also been stretched from five years to twelve.

PM Modi's already flagged the bigger picture back in March: India's chip market is set to more than double, from about $50 billion (bn) to over $100 bn by decade's end, and the country wants a much bigger slice of that market domestically.

Given the pivot from fabs to full-stack ecosystem building, here are 5 Indian semiconductor stocks to watch.

#1 Kaynes Technology- Advanced Packaging

First on the list is Kaynes Technology.

Over the years, the company has transformed itself from an electronics manufacturing services (EMS) player into an integrated technology company offering end-to-end solutions across design, manufacturing, testing, and semiconductor packaging.

Its semiconductor business is housed under its wholly owned subsidiary, Kaynes Semicon, which focuses on advanced semiconductor manufacturing. The subsidiary operates facilities built to global semiconductor standards, backed by modern infrastructure, precision engineering, and scalable production capabilities.

A major milestone came on 31 March 2026, when Prime Minister Narendra Modi inaugurated Kaynes Semicon's semiconductor facility in Sanand, Gujarat. The project, approved by the Union Cabinet in September 2024 under the India Semiconductor Mission (ISM), involved an investment of Rs 33 bn.

The Sanand unit is an OSAT (Outsourced Semiconductor Assembly and Test) facility that tests and packages semiconductor chips before they are supplied to customers. It has the capacity to process around 6.3 million chips per day, making it one of India's key steps toward building a domestic semiconductor manufacturing ecosystem.

The company is also looking beyond chip packaging. According to media reports from 6 April 2026, Kaynes Semicon plans to tap opportunities under the upcoming ISM 2.0 scheme by expanding into gallium nitride (GaN) and micro-LED technologies.

Speaking to Moneycontrol, CEO Raghu Panicker said the company has begun evaluating a GaN fabrication unit focused on power applications, in line with the government's push for next-generation semiconductor technologies. He also said Kaynes Semicon is exploring the micro-LED segment and could seek incentives under the ISM 2.0 scheme to support these expansion plans.

With its presence in semiconductor packaging and plans to expand into next-generation technologies like GaN and micro-LEDs, Kaynes Technology is well aligned with ISM 2.0's focus on building a complete domestic semiconductor ecosystem, making it a stock to watch.

For more details, see the KAYNES TECHNOLOGY company fact sheet and quarterly results.

#2 MosChip Technologies- Chip Design Next on the list is MosChip Technologies. MosChip operates in the chip design segment, one of the most critical parts of the semiconductor value chain. The company has been in the industry for over 25 years and is among India's earliest fabless semiconductor companies. Over the years, MosChip has built expertise across semiconductor technologies ranging from 180nm to advanced 2nm nodes, serving customers across digital, analog, and mixed-signal chip designs. Its services span the entire chip development process-from architecture and RTL design to verification, FPGA development, IP integration, embedded software, validation, testing, and production support. The company has also completed more than 600 successful tape-outs, making it a trusted design partner for global semiconductor companies. MosChip's semiconductor solutions are used across several high-growth industries, including high-performance computing (HPC), automotive, consumer electronics, industrial automation, power management, and communication technologies. As ISM 2.0 shifts the focus beyond fabrication to building a complete semiconductor ecosystem, including chip design, design services, and other upstream capabilities, MosChip's established expertise makes it a company to watch. For more details, see the MOSCHIP TECHNOLOGIES company fact sheet and quarterly results. #3 Gujarat Fluorochemicals - Semiconductor Specialty Materials Next on the list is Gujarat Fluorochemicals (GFL). Unlike companies involved in chip design or packaging, Gujarat Fluorochemicals is building its presence in the specialty materials segment of the semiconductor value chain. As India aims to reduce its reliance on imports under ISM 2.0, high-purity chemicals and fluoropolymers are expected to play an increasingly important role in domestic semiconductor manufacturing. The company has been expanding its advanced fluoropolymer business through its Dahej facilities, where it manufactures products used in semiconductor fabrication and chip-making equipment. One of its key focus areas is FFKM (Perfluoroelastomer), a high-performance material used in semiconductor manufacturing because of its exceptional chemical resistance and thermal stability. GFL has commercialised FFKM for semiconductor applications and is developing specialised grades that meet the stringent purity standards required by advanced semiconductor fabs. The company has also developed ultra-high-purity PFA (Perfluoroalkoxy) grades for semiconductor applications. These materials are used in fluid handling systems and processing equipment where contamination must be kept to an absolute minimum during chip manufacturing. Beyond this, GFL is expanding production of advanced fluoropolymers such as PVDF, FKM, and VDF, which are finding applications across semiconductors, EVs, solar panels, 5G infrastructure, and other next-generation industries. As ISM 2.0 broadens its focus to strengthening the entire semiconductor supply chain, including specialty chemicals, raw materials, and manufacturing inputs, Gujarat Fluorochemicals stands out as a company to watch for its growing presence in the high-performance materials segment. For more details, see the GFL company fact sheet and quarterly results. #4 ASM Technologies - Semiconductor Equipment Next on the list is ASM Technologies. ASM Technologies operates in the semiconductor equipment segment, supplying engineering and technology solutions used in semiconductor manufacturing. The company has over 2,000 person-years of experience working with global semiconductor equipment manufacturers. It has built expertise in designing and developing systems and sub-systems for critical semiconductor manufacturing equipment, including PVD (Physical Vapour Deposition), CVD (Chemical Vapour Deposition), RTP (Rapid Thermal Processing), Etch, CMP (Chemical Mechanical Planarisation), and inspection tools. ASM specialises in the design, engineering, and manufacture of customised capital equipment for high-growth industries such as semiconductors and electronics, positioning it as an important player in the manufacturing value chain. In a recent development, the company received approval from the Ministry of Electronics and Information Technology (MeitY) under the Electronics Component Manufacturing Scheme (ECMS) for its proposed Rs 5.65 bn investment in high-precision capital equipment manufacturing. The project is eligible for a 25% government incentive, amounting to around Rs 1.4 bn, to support its expansion in India's electronics and semiconductor ecosystem. Further strengthening its semiconductor ambitions, ASM-HHV Engineering, a 50:50 joint venture between ASM Technologies and Hind High Vacuum (HHV), plans to develop a prototype for silicon crystal growing equipment. The company expects to leverage opportunities arising from India Semiconductor Mission (ISM) 2.0, which aims to strengthen the country's domestic semiconductor supply chain. As ISM 2.0 expands its focus beyond chip fabrication to include semiconductor equipment and manufacturing infrastructure, ASM Technologies is a company worth watching for its growing presence in this critical segment of the value chain. For more details, see the ASM TECHNOLOGIES company fact sheet and quarterly results. #5 CG Power and Industrial Solutions - Advanced Packaging Next on the list is CG Power and Industrial Solutions. Traditionally known for its electrical equipment business, CG Power has been steadily expanding its presence in India's semiconductor ecosystem through semiconductor packaging and testing. Its subsidiary, CG Semi Private Limited, launched its first Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, in August 2025. With this, the company became one of India's early full-service OSAT players, offering both conventional and advanced semiconductor packaging solutions. The Sanand facility is being developed in partnership with Japan's Renesas Electronics and Thailand's Stars Microelectronics. Backed by support from the central and Gujarat governments, the joint venture plans to invest over Rs 76 bn over the next five years to strengthen India's semiconductor manufacturing capabilities. According to media reports dated 5 July 2026, Executive Vice Chairman Vellayan Subbiah said the company is targeting production of 16 m chips per day and aims to secure Grade 1 qualification within the next 18 to 24 months. He added that the company has already qualified its chips with a few customers and begun exporting semiconductor chips from India, with Renesas becoming its first customer. Beyond packaging, CG Power is also expanding into next-generation semiconductor technologies through its subsidiary Axiro Semiconductor, which focuses on RF, mmWave, wireless infrastructure, and satellite communication technologies. These are expected to play a key role in future 6G networks and AI-driven connectivity. In April 2026, Axiro Semiconductor, along with Japan-based venture capital firm MPower Partners, invested in Japanese fabless chipmaker EdgeCortix, which develops energy-efficient AI processors. The investment reflects the company's growing interest in advanced semiconductor and AI technologies. As ISM 2.0 shifts its focus toward building a complete domestic semiconductor ecosystem, including advanced packaging and testing capabilities, CG Power remains a stock to watch. For more details, see the CG POWER & INDUSTRIAL company fact sheet and quarterly results. Conclusion With ISM 2.0, India is moving beyond setting up semiconductor fabs to building a complete and self-reliant semiconductor ecosystem. Before this, in the Union Budget for FY27, Finance Minister Nirmala Sitharaman announced the next phase of the mission, with a focus on semiconductor equipment, specialty materials, full-stack chip design capabilities, and supply chain resilience. Further outlining the roadmap, Electronics and IT Minister Ashwini Vaishnaw said the government's priorities include supporting chip design companies and startups, developing the entire ecosystem-from equipment and materials to testing and deepening India's semiconductor talent pool. He also said India aims to gradually move towards advanced semiconductor nodes such as 2 nanometres. The opportunity is also drawing global interest. This is set to bolster Indian semiconductor stocks. However, while the long-term opportunity remains strong, investors should approach the space with a balanced view, focusing on execution capability, policy rollout, and valuation comfort before making investment decisions. Investors should carefully evaluate these companies' fundamentals, corporate governance, and valuations as key factors when conducting due diligence before making investment decisions. --- Advertisement ---

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