4 Stocks in the Semiconductor Chip Manufacturing Ecosystem

Semiconductor manufacturing is an extremely complex, multi-stage process that transforms raw materials into the tiny, intricate electronic circuits that power all modern technology.

It's generally divided into two main parts: Front-end (fabrication) and back-end (assembly, testing, and packaging).

The front-end is where the integrated circuits (ICs) are created on a silicon wafer. This is done in highly controlled environments called cleanrooms, which are many times cleaner than a hospital operating room. The back-end manufacturing involves assembly, testing, and packaging (OSAT).

While India has a strong existing ecosystem for semiconductor design (fabless companies) and a growing capacity back-end (assembly, test, and packaging), the first full-scale commercial front-end fabs are only now being established.

Among those likely to set-up facility include Tata Electronics (TEPL) & PSMC (Taiwan) and iCSem Private Limited & Clas-SiC Wafer Fab Ltd. (UK).

In any case, here are 4 listed stocks that either have or will establish the "back-end" of chip production, preparing the fabricated chips for final use. While not full-scale fabs, they are a crucial part of the semiconductor ecosystem.

#1 CG Power & Industrial Systems

First on the list is CG Power & Industrial Systems (CG Power).

The company is a leading engineering conglomerate specialising in electrical engineering products and solutions.

CG Power has entered the semiconductor sector through its subsidiary CG Semi Pvt Ltd. The company has formed a joint venture with Japan's Renesas Electronics Corporation and Thailand's Stars Microelectronics to set up one of India's first end-to-end outsourced semiconductor assembly and test (OSAT) facilities.

The manufacturing facility is located in Sanand, Gujarat, with an initial capacity expected to ramp up to 15 million (m) units per day.

The overall project involves an investment of approximately Rs 76 bn (US$ 870 m) over five years. The government of India supports this initiative with a fiscal support agreement, providing up to 50% subsidy on eligible capital expenditure, underscoring the project's importance to national semiconductor ambitions.

The OSAT facility covers a wide range of products from legacy to advanced semiconductor packages, serving industries including automotive, consumer electronics, industrial, 5G, defence, and IoT.

CG Power and Industrial Solutions Financial Snapshot (FY23-25)

On the financial front, the company reported revenues of Rs 28,781 m in Q1 FY26, as against Rs 22,275 m in the corresponding period of last year. The net profits of the company increased to Rs 2,669 m in Q1 FY26, from Rs 2,412 m YoY.

Moving forward, CG Power has been expanding rapidly. On the cards is a brownfield expansion of transformer capacity from 25,000 MVA to 40,000 MVA which is progressing on schedule.

Additionally, the company has approved a greenfield project to add another 45,000 MVA, with a planned investment of Rs 7,120 m. Once completed, CG Power's total transformer capacity will reach 85,000 MVA by FY28 - positioning the company as one of the key players in the segment globally.

The company's acquisition of a 55.6% stake in G.G. Tronics India Private Ltd has strengthened its position in railway safety systems, particularly the 'KAVACH' automatic train protection system.

Overall, CG Power's growth is backed by capacity expansion and diversification, making the company a compelling growth story.

To know more check the CG Power fact sheet and latest quarterly results.

#2 Kaynes Technology India

Second on our list is Kaynes Technology India.

The company is a leading integrated electronics manufacturer in India with over three decades of experience. The company offers end-to-end and IoT solutions-enabled integrated electronics manufacturing across various industry verticals.

Kaynes Technology's new project is to set up a semiconductor assembly, testing, marking, and packaging (ATMP) unit in Sanand, Gujarat, with an investment of Rs 33.07 bn.

The plant will have a capacity of 6.3 m chips per day and will cater to applications across industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones segments.

It's currently undergoing multi-month validation trials, with commercial-scale deliveries to its anchor customer Alpha Omega Semiconductor expected to start from October 2025. Full-scale production is planned for January 2026.

Kaynes Technology India Financial Snapshot (FY23-25)

On the financial front, the company reported revenues of Rs 6,735 m in Q1 FY26, as against Rs 5,040 m in the corresponding period of last year. The net profits of the company increased to Rs 746 m in Q1 FY26, from Rs 508 m YoY.

Moving ahead for FY26 the company has planned commissioning of HDI PCB and OSAT plants, expanding addressable opportunities in miniaturised PCBs, chip-scale packaging, and complex substrate solutions.

It's looking at acceleration of smart manufacturing technologies across facilities, including AI-driven production systems and robotics-enabled automation.

The company is also expanding the product portfolio to include embedded platforms, smart control modules, and co-developed ODM IPs across mobility, industrial automation, and power electronics.

Kaynes Technology's aggressive expansion, government backing, diversified client base, and focus on advanced semiconductor and electronics manufacturing position it well.

To know more check the Kaynes Technology India fact sheet and latest quarterly results.

#3 Tata Elxsi

Third on our list is Tata Elxsi.

Tata Elxsi is a specialises in design and technology services across multiple industries including automotive, media and communications, healthcare, transportation, and semiconductors.

It's involved in the semiconductor sector, through design and technology services rather than manufacturing. The company focuses on product engineering and solutions across domains including automotive, media, communications, and healthcare.

It's also a significant player in semiconductor chip design services, offering expertise in AI, machine learning, and semiconductor system integration.

Tata Elxsi Financial Snapshot (FY23-25)

On the financial front, the company reported revenues of Rs 8,921m in Q1 FY26, which was lower than Rs 9,265 m in the corresponding period of last year. The net profits of the company dropped to Rs 1,444 m in Q1 FY26, from Rs 1,841 m YoY.

Moving ahead, the management of the company has acknowledged that FY26 brings its share of opportunities and challenges, shaped by unpredictable global trade renegotiations, supply chain restructuring, heightened geopolitical risks, and currency fluctuations.

However, the company is focused on managing the controllables and advancing its growth agenda in terms of embracing AI holistically in line with the 'lean Forward' strategy. It's also looking to fast track and execute strategic long-term deals signed with global auto majors.

Tata Elxsi during the year plans to consolidate AI and design-led automotive capabilities for the EV segment and leverage them for drones. The company is also looking to penetrate further into aerospace and defence verticals.

To know more check the Tata Elxsi fact sheet and latest quarterly results.

#4 MosChip Technologies

MosChip Technologies is India's first publicly listed fabless semiconductor and system design company. It offers end-to-end semiconductor design solutions with expertise ranging from RTL design, verification, and physical design to analog design and layout.

MosChip Technologies Financial Snapshot (FY23-25)

On the financial front, the company reported revenues of Rs 1,356 m in Q1 FY26, which was a sharp jump from Rs 804 m in the corresponding period of last year. The net profits of the company surged to Rs 109 m in Q1 FY26, from Rs 40 m YoY.

The company recently repaid all long-term debt, significantly strengthening its balance sheet.

Moving forward, MosChip Technologies is expanding its engineering talent and improving delivery frameworks to support a wider range of customer needs-from ASIC development to innovative product solutions.

The company's flexible engagement models enable it to collaborate with customers at any stage of their product lifecycle, providing differentiated value across various technologies and markets.

MosChip Technologies is developing a Smart Energy Meter IC, a project partially funded under the Government of India's Design Linked Incentive (DLI) Scheme.

This initiative aligns with its vision to support energy efficiency and domestic innovation through indigenous silicon solutions. The company will explore both the domestic and international markets through this product.

To know more check MosChip Technologies fact sheet and latest quarterly results.

Conclusion

The semiconductor industry in India is poised for transformative and rapid growth, driven by strategic government initiatives, large-scale investments, and a growing domestic market demand.

Key drivers include the rollout of 5G, adoption of AI, electric vehicles, and IoT technologies, which push semiconductor usage across mobile, IT, automotive, and industrial sectors.

However, risks include industry cycles, technological disruptions, and geopolitical factors.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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