Notification
No new Notification messages
Q2 FY'24-25 Results of Top Companies
Reliance, TCS, HDFC Bank & more: Explore key financial highlights from India's top quarterly results.
Open a Free Demat Account
Pay ZERO maintenance charges for the first year, get free stock picks daily, and more.
Diwali Offer: MTF at just 9.99%
Iss Diwali, Investments Ko Karo 4X with our Trade Now, Pay Later (MTF) feature
Track Market Movers Instantly
Stay updated with real-time data. Get insights at your fingertips.

Semiconductor Stocks: Top Picks for 2024 and Market Insights

Listen to our Podcast: Grow your wealth and keep it secure.

0:00 / 0:00

The Indian market for semiconductors is blooming. With a valuation of around $23.2 billion in 2022, and an estimate of growth of around $80.3 by 2028, there is no stopping the industry anytime soon.¹

But what are semiconductors and semiconductors stocks? Let's find out. To put it simply, semiconductors are the electrical components used in devices to keep the electricity running. This means your smartphones, PCs, and all other gadgets have semiconductors installed in them. 

Semiconductor stocks are the stocks of all companies producing semiconductors and are listed in the Indian stock market. These stocks play a crucial role in the country's technical progress and innovation. 

Types of Semiconductor Stocks

Before going any further, let's understand the types of semiconductors. These semiconductors are generally of two types: Intrinsic and Extrinsic semiconductors. 

  • Intrinsic Semiconductors

This type of semiconductor is known for its chemical purity. Some of the examples include silicon or germanium. 

  • Extrinsic Semiconductors

Extrinsic semiconductors have relatively lesser purity than intrinsic semiconductors. These are further divided into two categories: P-type and N-type semiconductors. The P-type conductors have excess protons or positively charged elements. Ultimately, N-type semiconductors are packed with an excess of negative elements called electrons.

Benefits of Investing in Semiconductor Stocks

The market for semiconductors and semiconductor chips in India is growing. Thus, there is a rise in the stock prices of semiconductor-manufacturing companies. Being smart and investing in the best semiconductor stocks can help you earn several advantages. 

Here are some of the benefits of investing in semiconductor stocks: 

  • Portfolio Diversification

Semiconductors have been used in different businesses, including industries like healthcare, manufacturing, electronics, and much more. The variety of industries allows for portfolio diversification. You may invest in these well-performing best semiconductor stocks across different industries. This portfolio diversification can help you minimise the risks. 

  • Scope for Growth

Given the era we are living in, semiconductor demand is only likely to grow more. With the rise in technology updates and digital gadgets, the demand for semiconductors is only going to grow in the future. Thus, helping investors make great benefits in the future. 

  • Huge Market Potential

The industry has a huge potential for benefits given the existing and coming trends of automation and electronics. This huge market potential can be quite helpful for investors in making higher profits. 

  • Extra Government Support

In addition to all this, the sector enjoys a huge government sector. The Indian government has launched a variety of schemes like the PLI scheme and more for local production of semiconductors. This support has a positive reaction on market sentiment, appreciating the value of these semiconductor stocks. 

Factors to Consider Before Investing in Semiconductor Stocks

Investing in semiconductor stocks can help you earn several benefits. However, it is important to understand that the same involves risks too. So, before you go ahead with your investments in these stocks, here are a few factors to consider:

  • Compare the Companies

Before finalising your investment in these semiconductor stocks, it is important to compare the top companies. To ensure you choose the best semiconductor stocks, consider looking into a variety of factors, like the company's performance, financial health, potential for growth, dividend payment regime, and much more. 

  • Compare the Stock Prices

Once you're done comparing the company's profile, consider analysing the stock prices too. The single share of these businesses is shown by their stock prices. You can calculate it by dividing the business’s entire market value by the quantity of its available shares. Further, factors like technology advancements, market demand, and government support play a crucial role in affecting the stock prices in the Indian Stock Market. 

  • Strategic Collaborations

Before you choose the best semiconductor stocks for yourself, try tapping into the collaborations of your preferred choices. See what other industries the company tries to collaborate with and whether they align with technical advancements. Don't forget to compare their position and outlook on partnership with different industries. 

  • Understand the Risks

Investments in semiconductor shares can help you earn great profits. However, you should not forget about the related risks. The industry struggles with a few related risks coming from market fluctuations, trade laws, and more. You should be careful towards understanding these elements and being vigilant in their monitoring.

  • Follow Market Dynamics & Trends

Understanding market dynamics, key technology, and emergency trends can also be of great help while making investments. Thus, before going to start making investments, keep a tab on emerging trends like 5G, and more. 

  • Keep a Check on the Regulatory Framework

Understanding the regulatory framework relating to semiconductor companies is also an important factor to consider. You must be aware of government programs, or restrictions that can cause changes in price and impact your overall investments.

Top Semiconductor Companies to Watch

Here is a list of some of the best semiconductor stocks you may consider investing in. The list is prepared by taking note of several factors like market ratings, stability, technology updates, etc. 

  • Bharat Electronics Ltd.

Working under the guidance of the Ministry of Defence, Bharat Electronics Ltd. was established in 1954. The company was set up to look after the electronic demands of the defence sector. However, today, the company produces a wide range of items, like radars, warfare equipment, and more. Further, it aims to expand its production line across different industries like healthcare, aviation, etc. 

  • Tata Elxsi Ltd. 

From product design to its manufacturing and integration, Tata Elxsi has made a name for itself in India and worldwide. The company shows expertise across different industries and its futuristic collaborations are significant for India's semiconductor businesses. Tata Elxsi produces EVs, semiconductors, and much more. 

  • Dixon Technologies

Established in 1993, Dixon Technologies is a popular name in the realm of electrical manufacturing products. The company manufactures a wide range of consumer products like LEDs, PCBs, and other electronic appliances like washing machines. 

  • Havells India Limited

With product availability in more than sixty countries, and over 35 centres in India, Havells India Limited offers a great investment opportunity. The company is a popular manufacturer of power equipment and electrical goods. Its product line is quite diverse and includes everything, like fans, motors, switches, electrical appliances, and whatnot. 

  • HCL Technologies

HCL Technologies is a leading tech company offering programming and consultancy services. Over the last five years, the revenue of the company has seen an annual growth rate of around 12. 67%.¹ This speaks of its financial health and potential, making it an attractive investment avenue. 

  • CG Power & Industrial Solutions Limited

Founded in 1937, the Indian enterprise is engaged in the manufacturing and distribution of equipment aiding the generation of power, its distribution, and transmission. The company produces equipment for the power sector and industrial uses. It also makes conversion devices like stamping. 

Risks Associated with Semiconductor Stocks

As mentioned, investment in semiconductors offers a huge growth potential. But with it comes certain risks. Here are a few risks associated with semiconductor stocks in the Indian Stock Market:

  • Market Volatility

The semiconductor shares in the country are highly vulnerable to fluctuations. Technology changes, government policies, etc, affect their prices, making it difficult to calculate your benefits. 

  • Cynical Design

According to industry experts, the semiconductor businesses are of cynical design. This means they are meant to go up and down, which can hamper your investment predictions. 

  • High Competition

The Indian semiconductor industry is a highly competitive one. Different companies vouch for their shares, leading to competition in prices, which may reduce the margins on profit. 

How to Invest in Semiconductor Stocks

Now that you know about semiconductor stocks, their benefits, and their risks, let's move forward and see how to invest in these. Investing in these stocks is easy and can be done through several methods.

For example, you may simply invest in semiconductor Exchange-traded Funds or ETFs or even mutual funds. Additionally, considering individual shares can also be a means to invest into these semiconductor stocks. 

Research carefully and consider following market trends to make informed investment choices. 

Future Trends in the Semiconductor Industry

Despite the related risks and challenges in the semiconductor businesses, they are likely to grow and thrive. This is because of the huge demand for electronics and modern gadgets. Given their global usage, the industry is almost unlikely to be replaced anytime soon. In fact, quantum computing and other modern science developments are going to fuel their growth and development. 

With technology playing a key role in our daily lives, the semiconductor businesses are here to stay, evolve, and drive innovation. 

Conclusion

Semiconductor stocks refer to the shares of any company engaged in the production, design, or distribution of semiconductors. The extensive use of semiconductors and their future potential invests in semiconductors as a profitable choice. It can also help you with portfolio diversification, risk reduction, and more.

However, before finalising your investment decisions, you should always consider the risks related to the industry. Consider understanding factors like market volatility and competition to stay informed and vigilant. Further, make smart investment decisions by comparing companies, stock prices, and their growth potential. Research and awareness are the keys to making smart investment decisions and earning the best profits out of them. 

You can start investing in these semiconductor stocks by opening a demat account and consulting with a reliable brokerage of your choice. 

Happy investing!

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

Share this article: 

Frequently Asked Questions

What are the top 3 semiconductor companies?

Answer Field

The top 3 semiconductor companies across the world are Samsung Technologies, Intel, and Taiwan Semiconductor Manufacturing Corporation Ltd. While in India, the top companies are Bharat Electronics Ltd, Tata Elxsi, and Dixon Technologies.

Can India become a semiconductor hub?

Answer Field

With a variety of government schemes, and initiatives, the government of India is dedicated to making India a semiconductor hub. The government promotes the industry by launching a variety of semiconductor projects, assembly, testing, and packaging facilities for semiconductors. The country is on the right path to emerge as a global player in this field.²

What will be the semiconductor industry in India by 2030?

Answer Field

With a variety of government policies and regulatory support, the Indian semiconductor industry is likely to exceed the valuation of around $100 billion, says Jitin Prasada, the Union Minister of State for Information Technology. ³

Which semiconductor stock is best?

Answer Field

There are a variety of top-performing semiconductor stocks in India. The list is prepared considering factors like market valuation, performance, stock prices, etc. Some of the best stocks include HCL Technologies, Vedanta Ltd, and Bharat Electronics Ltd.

Who is the CEO of Semiconductor India?

Answer Field

As of 2024, Ajit Manocha is the CEO and president of Semiconductor Equipment and Materials International or SEMI.⁴

Why is India behind in semiconductor manufacturing?

Answer Field

India has started emerging as a global player in the testing and packaging of semiconductors. However, the manufacturing part is still lagging. The main reason behind the same can be attributed to the lack of a skilled workforce, raw materials, and the absence of a robust supply chain. 

No Result Found

Read More Blogs

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading

Bajaj Broking App Download

8 Lacs + Users

icon-with-text

4.8+ App Rating

icon-with-text

4 Languages

icon-with-text

₹5000+ Cr MTF Book

icon-with-text