Best Semiconductor Stocks in India in August 2024 Based on 5Y CAGR

India has begun revolutionising the semiconductor market by offering incentives to domestic and international players. These steps may prove to make India a significant hub for semiconductor manufacturing in the future. In 2022, the Indian semiconductor market was valued at US$ 26.3 billion and is expected to expand at a CAGR of 26.3% to US$ 271.9 billion by 2032. The said increase is likely to be supported by the rising use of mobile devices, computers, electronic items, etc. In this article, check the best semiconductor stocks in August 2024 based on the 5-yr CAGR.

Best Semiconductor Stock Based on 5Y CAGR

Note: The stocks have been sorted based on 5Y CAGR and as of August 22, 2024

Overview of 5 Best Semiconductor Stocks

1. RIR Power Electronics Ltd

RIR Power Electronics Ltd is engaged in the manufacturing of traditional semiconductor devices such as bridges, power modules, diodes, rectifiers and thyristors. The company has successfully implemented projects for manufacturing high-power semiconductor devices which have the capacity to manufacture products ranging up to 9,000 volts and 6,000 amperes. The company is setting up India’s first SiC power semiconductor plant at a capex of ₹6,186 million in Odisha.

Key Metrics:

• Return on Equity (ROE): 14.7%
• Return on Capital Employed (ROCE): 13.3%

2. SPEL Semiconductor Ltd

Incorporated in 1984, SPEL Semiconductor Ltd offers wafer sorting, assembly, test, and drop-shipment services for IC chips. For FY24, the company’s sales increased to ₹1,200.41 lakh, compared to ₹1,116.46 lakh in FY23. The outlook for FY 2024-25 is good, and SPEL has plans to introduce new customers from Europe and the US regions.

Key Metrics:

• ROE: -16.5%
• ROCE: -5.04%

3. ASM Technologies Ltd

ASM Technologies provides consulting and Product development services in the areas of Engineering Services and Product R&D. ASM’s semiconductor segment focuses on embedded engineering and VLSI design, leveraging the expertise available in regions like Southeast Asia and Eastern Europe.

Key Metrics:

• ROE: -5.30%
• ROCE: -0.91%

4. Dixon Technologies (India) Ltd

Incorporated in 1993, Dixon Technologies (India) Limited is an Electronic Manufacturing Services (EMS) company with operations in electronic product verticals such as consumer electronics, lighting, home appliances, closed-circuit television cameras (CCTVs), and mobile phones. It also undertakes reverse logistics operations. Besides, it manufactures security surveillance equipment, wearables and audibles, and AC-PCBs. Dixon is in the advanced stages of discussions with a large semiconductor equipment brand, a global brand for servicing its requirements of PCBA and certain mechanical products.

Key Metrics:

• ROE: 24.7%
• ROCE: 28.8%

5. Moschip Technologies Ltd

Moschip Technologies Ltd is a semiconductor and system design company with a focus on Turnkey ASICs, Mixed Signal IP, semiconductor & product engineering, and IoT solutions catering to aerospace and defence, consumer electronics, automotive, medical and networking and telecommunications. During Q1 FY2025, MosChip secured a ₹509.37 crore contract from the Centre for Development of Advanced Computing (CDAC). This contract involves the development of a high-performance computing (HPC) SoC (System on a Chip) using state-of-the-art 5nm (nanometer) technology,

Key Metrics:

• ROE: 5.17%
• ROCE: 6.62%

Government Initiatives to Boost Semiconductor Market

• Within the Digital India Corporation, there is a dedicated division known as the India Semiconductor Mission (ISM). Its primary objective is to establish a robust semiconductor and display ecosystem and establish India as a major participant in the world of electronics design and manufacture.
• Fiscal support of 50% of the project cost on a pari-passu basis for all technological nodes under the Semiconductor Fab Scheme.
• Under the Compound Semiconductor Scheme, 50% pari passu fiscal support of capital expenditures, including funding for discrete semiconductor fabs, is provided.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.