Top Semiconductor Stocks in India

Semiconductor industry in India will be top performing in the stock market in 2023 because of an increase in demand for technology that uses semiconductor products. India is more focused towards establishment of semiconductor facilities as to reduce its dependence on external sources which paves the way for plethora of opportunities to the investors. Let’s dive deep into this blog to understand about semiconductor stocks and the top producers of semiconductor stocks in India.

What are Semiconductor Stocks?

Semiconductor stocks or companies are those that are engaged in the manufacturing or marketing process of semiconductors which are used in a wide range of electronic devices like cars, laptops, household appliances, smart phones, gaming consoles, etc. The materials that are used in these devices are more conductive as compared to an insulator but less than a conductor. These small chips are designed in a manner to control the flow of electric current in electric equipment or devices.

Why to invest in Semiconductor Stocks in 2024?

The future of semiconductor stocks is closely associated with the development of various technologies such as electric vehicles, AI, IoT, and 5G networks. Increasing demand for technology is driving the need for semiconductors. It is a leveraging industry in India carrying huge potential in future. Despite recent challenges, semiconductor stocks are expected to grow in the long term because of continued demand for electronics and technological advances. The investors must diversify their portfolios by investing in these stocks after all the due diligence.

The industry came into limelight in recent years as the demand has surged immensely but the supply is limited globally. The industry is considered a lucrative investment opportunity for investors as it is expected to grow at a staggering rate of 20%. Also, the use of semiconductors is increased in areas like safety, networking, electrification, communication as well as electric vehicles as they gain popularity and production in India. The sector with high usage of semiconductors:

·Computer

·Communication

·Consumer

·Industrial

·Automotive

·Government

Top Semiconductor Stocks in India

India is a growing economy and semiconductor stocks in India have been a hot topic for investors throughout the world lately due to their rapid growth potential. It has been the best option of investment for investors in India as the technology continues to evolve. There are some key players in India to thrive the transformative drive in this sector. Let’s get to know some of the best semiconductor stocks in India.

Name	Market Capitalization(Rs in crores)	Sub Sector
Vedanta Ltd	140068.27	Metals – Diversified
HCL Technologies	402578.62	IT Services and Consulting
Tata Elxsi	46054.67	Software Services
Dixon Technologies	46461.34	Home Electronics and Appliances
ASM Technologies Ltd	1247.51	IT Services and Consulting
Solex Energy Ltd	893.52	Industrial Machinery
SPEL Semiconductor Ltd	679.31	Electronic Equipments

Vedanta Semiconductors Private Limited

Vedanta Semiconductors Private Limited is a wholly owned subsidiary of Vedanta Limited that has a strong foot in India for manufacturing semiconductors in India. To be the leader i

n the market, Vedanta has been focusing on executing huge deals with several big players. The company has major goals in this sector and is set to invest approx. 20 billion for its growth.

The company has a motive of setting up a 40nm CMOS based semiconductor fab containing a capacity of 40000 wafers with an extended plan of upgrading the technology of manufacturing 28nm size chips. The mass production of semiconductors will cater to the application in mobiles, consumer electronics, automotives and network equipment.

HCL Technologies Ltd

HCL Technologies, a multinational IT and consulting company which was founded in 1976 offers software development services and information technology infrastructure services. HCL commits towards semiconductor innovation with improvised plans of setting up assembly and testing facilities for semiconductors. HCL has strategic partnerships as well as joint ventures with large companies to set up its position in the semiconductor ecosystem.

Tata Elxsi Ltd

Tata Elxsi is involved in engineering research and development of computer software and hardware which was founded in 1989. The company also operates in the system integration segment. The company also supports various designers in designing semiconductor wafers. The company has 40.9% of return on equity which is higher than the industry average; the sales have seen a growth of 16% per year for the last 10 years.

Dixon Technologies (India) Ltd

Dixon Technologies is a multinational electric manufacturing services company which manufactures electronic products like washing machines, televisions. Smartphones, LED Bulbs, etc. Dixon Technologies was founded in 1993 as Weston Utilities Ltd and now has a market capitalization worth Rs 46461.34cr with 5-yr CAGR of 75.73%. The company has a good ROE of more than 20% since the last 10 years with a growing sales at a CAGR of 32% for the last 10 years.

ASM Technologies

ASM Technologies has made constant efforts to be the key player in India’s semiconductor resurgence by inclining towards innovation and diversification. It has implied the strategies towards semiconductor equipment manufacturing encouraging a shift towards indigenous semiconductor capabilities. Apart from the challenges that the company faces related to revenue declines and increased debt, the focus has been towards being a great manufacturer of semiconductor in India.

Things to consider before investing in semiconductor stocks

An individual’s research matters the most while investing in stocks and should not only be based on recommendations. Investing in semiconductor stocks requires thorough analysis of the stocks and industry on an individual basis or you can consult your financial advisor foe better results. Some important things that should be considered by an investor are:

Financials

The semiconductor company must have strong financials depicting a growth above industry average. The debt should be on a manageable level or it should be debt free. The financial ratios as per the fundamentals which include ROE and Debt to Equity ratio should support the investments.

Technical

The stocks must have technical support to push the prices in upward direction. The stocks that are following an uptrend with no such strong supply zones can be looked forward to for a great move in the market.

Assess Technological Factors

The investors must carefully assess the technological process of each company. The history of each company with its development in technology must be understood before investing into it as the semiconductor industry is closely tied with technological advancements in a company.

Also Read: Blue Chip companies

Market Trends

Investors should keep themselves updated about the industry and market trends. To make informed investment decisions, it is essential for investors to be familiar with industry shifts, geopolitical influences and emerging technologies.

Wrap it up…

Semiconductor industry is set to grow in the future because of increased demand in the EV sector and other areas where the use of semiconductors have grown significantly. You can learn about the sector through sector analysis in the demand and supply theory offered by GTF.

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