Top 5 Semiconductor Stocks in India and How They Perform in 2022

Since then, semiconductor stocks have been the talk of the town, and for good reason.

technological advancements such as EV Revolution And the 5G rollout has fueled demand for semiconductors over the years.

The rise in the use of devices such as smartphones and smart TVs in the pandemic calls for further assistance.

However, the pandemic also caused disruptions that disrupted supplies.

The demand-supply mismatch saw a sharp rise in semiconductor stocks and touched their all-time highs.

Although the discussion started due to the lack of chips, the Indian government’s effort is another motivating factor for the industry.

The government has announced a PLI scheme to encourage local manufacturing of semiconductors and setting up demonstration units.

this plan is very important 760 billion will be invested in the next 5-6 years.

Global semiconductor giants are also showing interest in setting up shop in India. This gives a much needed setback to the government’s plan.

So how have the shares of semiconductor companies performed in 2022 so far? let’s find out.

#1 Vedanta

Mine and metals conglomerate Vedanta has formed a joint venture (JV) with Foxconn of Taiwan to manufacture semiconductor chips in the 28nm range.

The joint venture will look at setting up a semiconductor manufacturing plant in the next two years.

To become India’s first chip maker, Vedanta is seeking 1,000 acres of free land, water and electricity at subsidized and fixed prices, among other incentives.

In a recent development, the government asked companies to provide more details on how they plan to acquire the necessary expertise or acquire a third partner with demonstrated technical capability.

The companies have not yet disclosed the location of the manufacturing plant.

This is the first joint venture in electronics manufacturing after the announcement of the PLI scheme by the government.

Vedanta Group is planning to invest US$15 billion in a phased manner over the next 5-10 years to manufacture displays and semiconductor chips in India.

Vedanta has also proposed to set up a display fab on its own.

Note that this is not Vedanta’s first attempt to enter the semiconductor space. Although none of these attempts were successful, the company is ready for another attempt.

The company’s shares have come under pressure over the past few months and have fallen more than 33 per cent so far in 2022.

#2 Rajesh Exports

Rajesh Exports is investing US$3 billion to set up the country’s first electronic-display plant in the state of Telangana. The company is also an applicant of the government’s PLI scheme.

Announcing the investment, Telangana Industries Minister KT Rama Rao said:

• What was so far possible only in Japan, Korea and Taiwan, will now happen in Telangana.

  Building a massive ecosystem of partners and subsidiaries supplying world-class television, smartphone and tablet manufacturers.

Industry body ICEA estimates that the demand for displays in India will be around US$60bn between 2021 and 2025.

Rajesh Exports, which has no prior experience in manufacturing electronics, is investing through a subsidiary Elest.

Elest was incorporated to diversify into the EV segment with display manufacturing.

The company’s shares have come under pressure over the past few months and have fallen nearly 20% so far in 2022.

#3 Ratonsha International Rectifier

Established in 1969, Ruttonsha manufactures semiconductor devices, power rectifier assemblies and semiconductor diodes.

When the government invited bids for semiconductor fab units, Ratonsha was the only company registered to manufacture compound semiconductors.

Compound semiconductors are different from silicon ones. About 20% of the world’s semiconductors fall into this category.

In 2005, Rutonsha was acquired by the promoters of Silicon Power Corporation, USA, giving it access to developmental and technical expertise.

Silicon Power Corporation is a leading corporation that provides high power semiconductor equipment.

Visicon Power Electronics is a wholly owned Indian subsidiary of Silicon Power Corporation. It is in the business of manufacturing silicon carbide (SiC) wafers and power electronic components through epitaxial process.

Ruttonsha has big plans to manufacture SiC based products in India. This is setting up a fab unit.

The company’s shares have fallen heavily over the past few months, eroding gains since January. They are down 2% so far in 2022.

#4 ASM Technologies

ASM Technologies has formed 50:50 JV with Hind High Vacuum (HHV). It undertakes design-led engineering and manufacturing of devices, sub-systems, sub-system components and components for the semiconductor and solar industries.

Speaking on the joint venture, Mr. Ravindra Srikantan, Managing Director, ASM Technologies said:

ASM Technologies provides consultancy and product development services in the areas of engineering services and product R&D.

ASM Technologies’ core clients include reputed clients involved in the manufacturing of semiconductor equipment and network equipment.

ASM Technologies has recently entered the areas of Virtual Reality (VR), Internet of Things (IoT), and Open edX Platform Management.

In line with other semiconductor stocks, ASM Technologies shares came under pressure after the Russo-Ukraine war. The stock is up close to 40% so far in 2022.

#5 Spell Semiconductor

SPEL Semiconductor is engaged in offering Electronic Integrated Circuits (ICs). Its products are mostly used in cell phones, computers, notebooks and personal digital assistants.

Its facility, Natronics, is India’s first and only semiconductor IC assembly and testing facility.

SPEL Semiconductor was the only company to register for semiconductor packaging under the government’s PLI scheme.

Packaging is an essential part of semiconductor manufacturing and design. This is usually done by an outsourced Semiconductor Assembly and Test (OSAT) vendor.

It affects power, performance and cost at the macro level, and the basic functionality of all chips at the micro level.

As the semiconductor production in the country picks up, the company is sure to have the advantage of being the only OSAT in the country.

The company’s current customers are some of the largest integrated equipment manufacturers (IDMs) and fabless companies in the Americas, Asia and Europe.

It is the only company in the list which has done well in 2022. The company’s shares are up more than 12%.

the road ahead…

If You’re Looking for Growth Stocks, You’ll Want to Get Semiconductor stocks rally, As industries move towards digitization, the demand for semiconductors will increase further.

So, if you thought that the semiconductor theme is just temporary and may be over soon, think again. The demand-supply mismatch is here to stay, and semiconductor stocks will make headlines again.

While these stocks have the potential to deliver huge returns, you must be very careful about which semiconductor stock to invest in.

There are only a few companies that are currently involved in this field. The right pick for turning your portfolio into the next Titan or Wipro could be X-Factor.

Happy investment!

Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.

This article is syndicated from equitymaster.com

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