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

Historically, India has been fully dependent on imports to fulfil its need for semiconductor devices due to the absence of semiconductor fabrication facilities in India. However, the picture has currently changed as India is gearing up in the industry with new facilities and support to players. The Indian semiconductor market was estimated at US$ 26.3 billion in 2022 and is likely to grow at a CAGR of 26.3% to US$ 271.9 billion by 2032. In 2022, India made several efforts to become a semiconductor hub, with exports reaching an all-time high of US$ 0.52 billion.  In this article, check the best semiconductor stocks in October 2024 based on the 5Y CAGR.

Best Semiconductor Stock Based on 5Y CAGR

Note: The stocks have been sorted based on 5Y CAGR and as of September 27, 2024

Overview of 5 Best Semiconductor Stocks

• RIR Power Electronics Ltd: RIR Power Electronics Ltd manufactures traditional semiconductor devices such as bridges, power modules, diodes, rectifiers and thyristors. In 2021, it acquired a 100% stake in Visicon for manufacturing Silicon Carbide (SiC) Wafers. 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): 18.9%
• Return on Capital Employed (ROCE): 15.3%
• ASM Technologies Ltd: ASM Technologies provides consulting and product development services in the areas of Engineering Services and Product The semiconductor division of ASM leverages its skills in Eastern Europe and Southeast Asia to focus on embedded engineering and VLSI design.

Key Metrics:

• ROE: -5.30%
• ROCE: -0.91%
• 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. SPEL maintains its relationship with all Customers in good form and puts efforts into meeting their QCDS factors. SPEL extends various Value-Added Services like package design, Test H W development & drop shipment to all its Customers which help to attract additional volumes

Key Metrics:

• ROE: -16.5%
• ROCE: -5.04%
• 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. 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. During Q1 FY25, the company continued to invest in its capacities and diversify into new product categories to support long-term growth opportunities with a huge focus on quality.

Key Metrics:

• ROE: 24.7%
• ROCE: 29.2%
• 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. During Q1 FY25, MosChip won 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%

Trends in Semiconductor Market

• In September 2024, Tata Electronics announced that it is investing ₹910 billion (US$10.84 billion) in its Gujarat Fab and ₹270 billion (US$3.21 billion) in its Assam assembly and testing unit. For this, it has signed an MoU with Tokyo Electron (TEL) to purchase equipment and services for its semiconductor facilities in Gujarat and Assam.
• During Prime Minister Narendra Modi’s visit to Singapore, several agreements were struck between the two countries, including ones about the development of semiconductor clusters and the development of talent in semiconductor design and manufacture.  

Conclusion

The semiconductor industry is filled with numerous opportunities backed by the government’s efforts and demand for semiconductor-related products. Investing in semiconductor stocks may present a growth opportunity with applicable risks.

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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.