Indian Semiconductor Stocks Surge Following Government Investment Plans

On Wednesday, September 11, several of India’s leading semiconductor stocks, including SPEL Semiconductor Ltd, ASM Technologies, and RIR Power Electronics, experienced a notable surge of over five to six percent. This increase comes in the wake of Prime Minister Narendra Modi‘s announcement of expansive semiconductor manufacturing and investment plans during the SEMICON India 2024 conference. The event is taking place in Greater Noida and showcases the country’s vision to become a global semiconductor hub.

Prime Minister Modi emphasized the importance of supply chain resilience in the global economy, positioning India as a reliable destination for semiconductor investments. This message invigorated chip stocks, propelling gains to six percent, breaking a two-day slump caused by profit bookings. The SEMICON India 2024 conference, spanning three days with a theme of ‘Shaping the Semiconductor Future,’ is set at the India Expo Mart.

The Prime Minister outlined India’s ambitious plans to expand the electronics sector to a $500 billion industry by the end of the decade, a substantial increase from the current $150 billion valuation. Stressing three critical factors—government reform, a growing manufacturing base, and a tech-savvy market ready to embrace innovation—he assured global investors that India would soon emerge as a semiconductor powerhouse. PM Modi also hosted a Semiconductor Executives’ Roundtable, underlining the strategic shifts placing India firmly on the global semiconductor map.

Stock performance reflected the optimism, with notable examples including SPEL Semiconductor and RIR Power Electronics, which hit their respective upper circuits. ASM Technologies shares saw an increase close to six percent. Despite these positive developments in semiconductor stocks, India’s major indices experienced a decline. The Nifty 50 index fell by 0.50 percent, closing at 24,915 points, while the S&P BSE Sensex declined by 0.53 percent, settling at 81,485 points. The shift in stock performance highlighted market volatility ahead of the anticipated U.S. consumer inflation report.

Market analysts like Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted that the session was marked by volatility, with profit booking intensifying in the final hours of trading. Tapse commented on the impact of China’s economic slowdown and falling crude oil prices on investor sentiment, while also highlighting the significance of upcoming U.S. inflation data in assessing future interest rate expectations from the Federal Reserve.