India’s Semiconductor Surge: A Look at Three Critical Enablers

India’s semiconductor industry is projected to be a major growth story, with market size estimates reaching as high as ₹8.9 lakh crore by 2030. While much of the spotlight is on the big-name chipmakers, three “hidden” stocks are emerging as key players in the booming semiconductor supply chain: Kaynes Technology, CG Power and Industrial Solutions, and VA Tech Wabag. These companies, through strategic partnerships and diversified business models, are positioning themselves to capitalize on this burgeoning sector.

Kaynes Technology: The OSAT Specialist

Kaynes Technology is at the forefront of India’s semiconductor journey through its subsidiary, Kaynes Semicon. The company is setting up a substantial Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, with a planned investment of ₹3,300 crore. OSAT facilities are crucial as they perform the final steps of chip manufacturing, including packaging, testing, and preparing the chips for use in electronic devices. Kaynes is also involved in manufacturing HDI bare-boards, a key component in electronic circuits. This strategic focus on a specialized yet vital part of the supply chain gives Kaynes a unique advantage and makes it a critical partner for future chipmakers in India.

CG Power: A Partner in Manufacturing

CG Power and Industrial Solutions is another company making significant moves in the semiconductor space. The company, in collaboration with Japan’s Renesas Electronics and Thailand’s Stars Microelectronics, is establishing a separate OSAT facility, also in Sanand, Gujarat. This venture, backed by a planned investment of ₹7,600 crore, highlights the company’s commitment to the semiconductor industry. While CG Power is traditionally known for its heavy electrical equipment, its foray into semiconductor manufacturing demonstrates its adaptability and alignment with India’s “Make in India” initiative. This partnership leverages global expertise to accelerate India’s entry into the high-stakes world of semiconductor fabrication.

VA Tech Wabag: The Water Treatment Backbone

While not a direct player in chip manufacturing, VA Tech Wabag holds a pivotal position in the semiconductor ecosystem. The fabrication process for semiconductors is extremely water-intensive, requiring large quantities of ultra-pure water. VA Tech Wabag, a leader in water treatment solutions, is ideally poised to provide the essential infrastructure needed for these new semiconductor plants. The company’s expertise in designing and building large-scale water treatment and desalination plants makes it an indispensable partner for any major semiconductor project. As more fabrication units are approved and built in India, the demand for VA Tech Wabag’s specialized services is expected to rise, making it a critical, albeit “hidden,” enabler of the country’s semiconductor ambitions.