Top Semiconductor Stocks in India

What are Semiconductor Industry Stocks?

Semiconductor stocks are shares of Indian chip manufacturing companies that design and develop the chips regulating electricity in phones, computers and other electronics. These firms play a crucial role in the value chain of electronics, telecommunications, automotive, and emerging areas like AI, IoT, and renewable energy solutions.

Overview of the Top 5 Semiconductor Stocks in India

1. Bharat Electronics Ltd: Established in 1954 under the Ministry of Defence, Bharat Electronics leads in defence electronics manufacturing, including radars and communication systems, while expanding into civilian and tech sectors across India.
2. HCL Technologies Ltd: HCL Technologies provides IT services, consulting, and digital transformation solutions, specialising in engineering, cloud computing, and software development to support global enterprises across industries.
3. Vedanta Ltd: Vedanta is a diversified natural resources company engaged in the exploration and production of oil, gas, and metals, with key operations in zinc, aluminium, iron ore, and power generation sectors.
4. ABB India Ltd: ABB India offers electrification, automation, and industrial digitalisation products and solutions, focusing on equipment for energy, utilities, and transport, with an emphasis on sustainable and smart technologies.
5. CG Power and Industrial Solutions Ltd: CG Power designs and manufactures transformers, switchgear, and electrical equipment for power transmission and distribution, providing engineering services to utilities and industrial customers nationwide.

Union Budget 2025–26: Focus on the Semiconductor Industry in India

The Union Budget 2025–26 highlights the Government of India’s push to strengthen domestic semiconductor capabilities with funding and supportive policies. Key takeaways include:

• ₹7,000 cr. allocation for semiconductor manufacturing, covering fabrication, packaging, research, development, and design initiatives.
• Support for fabless design startups and advanced testing and packaging infrastructure to build end-to-end domestic capacity.
• Targeted R&D programs in chip design, coupled with collaborations with academia and global technology partners, are used to train specialised talent.

The Budget reflects a focus on creating a robust indigenous semiconductor ecosystem, attracting global players, and nurturing innovation across the value chain.

How to Invest in the Best Semiconductor Stocks in 2025?

Here are a few steps you can follow to invest in the best semiconductor stocks in India 2025:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the top semiconductor stocks in India that are of interest to you. Investors can use tools like the Tickertape Stocks Screener to do this. The screener offers 200+ built-in filters to choose from, and investors can choose the parameters to research and generate a different Indian semiconductor companies.
3. Place a ‘Buy’ Order at the top for good semiconductor stocks in NSE of your choice.

Future Outlook for the Semiconductor Industry in India

• Policy Support and Incentives: The Production Linked Incentive (PLI) scheme and other government programs are in place, providing policy visibility and a structured framework for the semiconductor sector.
• Infrastructure and Clusters: Semiconductor clusters with shared facilities and infrastructure are being planned to support domestic capacity creation.
• Sectoral Demand Drivers: Electric vehicles, telecom, consumer electronics and emerging technologies are driving overall demand.
• Skilling and Talent Pipeline: Reports show a shortage of skilled professionals for chip design, testing and fabrication, hence the focus on workforce development.
• Execution and Global Partnerships: Progress will depend on project timelines, policy follow-through through and global technology partners.
• Long Term Ecosystem: The semiconductor ecosystem is in its infancy; the industry is closely monitoring supply chain robustness and infrastructure growth over the next few years.

Features of the Top Semiconductor Sector Stocks in India

• Continuous Innovation: Leaders, including some semiconductor penny stocks, invest in R&D to keep up with fast-changing technology.
• Robust Financials: Healthy cash flows, moderate debt and consistent profitability ensure long-term operational stability.
• Strategic Alliances: Partnerships with equipment vendors, OEMs, and cloud providers give a competitive advantage and speed to market.
• Resilient Supply Chains: Diversified sourcing and logistics network minimises production disruptions and meets demand reliably.
• Cyclical: Sector demand follows global industry cycles driven by economic trends and technology upgrades, with phases of semiconductor stocks with high growth and inventory corrections. Indian semiconductor companies’ revenue and market share can fluctuate based on these cycles.

Advantages of Investing in Semiconductor Stocks in India

• High Growth Potential: Indian semiconductor companies benefit from rising electronics demand, which may create growth opportunities as new applications and markets develop.
• Diversification: Investing in the top semiconductor companies listed in India can help diversify your portfolio. Various industries, including healthcare, automotive, and consumer electronics, use semiconductors. This diversification can mitigate risks associated with investing in a single industry.
• Technological Innovation: Continuous R&D and innovation can help companies advance technologies and maintain relevance in a rapidly evolving global industry.
• Government Support: Incentives, subsidies, and partnerships with global technology companies may support industry development and long-term ecosystem building.
• Domestic Demand: Digitalisation, electric mobility, renewable energy, and consumer electronics expansion may continue to drive local semiconductor demand.

Risks Associated with Investing in Indian Semiconductor Stocks

• Volatility: Most of the good semiconductor stocks may experience high price fluctuations. Changes in demand, technological shifts, or broader market trends add uncertainty to Indian semiconductor companies’ performance in the future.
• Cyclical Nature: The semiconductor industry in India exhibits a cyclical nature. It also goes through periods of expansion, often followed by phases of slower growth or corrections among semiconductor companies.
• Execution Delays: Building fabs or packaging units is complex. Delays in approvals, technology transfer, or workforce readiness may affect project timelines.
• Global Supply Chain Exposure: Dependence on imported materials and equipment may expose companies to geopolitical risks, trade restrictions, or currency fluctuations.
• Technology Obsolescence: Rapid technological advancements require ongoing R&D investments. Falling behind peers may affect competitiveness and the Indian semiconductor companies’ market share.

Factors to Consider Before Investing in Semiconductor Shares

• Order Book and Execution Record: For large companies, investors look at whether project milestones are being met to gauge execution capabilities.
• Capital Structure: High-capex companies require regular reviews of their debt, funding sources, and working capital to maintain liquidity and support growth efficiently.
• Profitability Trends: Margins vary across companies based on their position in the value chain, design, packaging or full-scale fabrication.
• Technology Partnerships: Access to advanced processes via global partnerships can affect a company’s competitiveness, production efficiency, and potential for higher returns, making it relevant for investors.
• Policy Developments: Many investors track changes in schemes, import duties or export guidelines as these can impact cost structures and profitability.