Business Expansion
Government of Madhya Pradesh and Paras Semiconductors Sign MoU for ₹6,200 Crore Semiconductor Facility
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- Paras Semiconductors, a subsidiary of Paras Defence & Space Technologies, has signed a Memorandum of Understanding (MoU) with the Government of Madhya Pradesh to establish a proposed ₹6,200 crore OSAT (Outsourced Semiconductor Assembly and Test) facility on the Ujjain–Indore Corridor.
- The project aims to strengthen India’s semiconductor ecosystem, support strategic applications and expand the company’s presence in advanced semiconductor manufacturing.
PRICE-SENSITIVE TRIGGER
Event: Paras Semiconductors signed an MoU with the Government of Madhya Pradesh to establish an advanced semiconductor packaging facility.
Type: Business Expansion
Impact: Positive
Why Investor Should Care:
- Proposed ₹6,200 crore investment.
- Entry into semiconductor packaging and advanced manufacturing.
- Supports India’s semiconductor self-reliance initiative.
- Creates a new long-term growth vertical beyond defence electronics.
Metrics:
Project Snapshot:
- Proposed Investment: ₹6,200 crore
- Land Allotted: 50 acres
- Location: Ujjain–Indore Corridor, Madhya Pradesh
- Facility Type: Advanced Semiconductor Packaging (OSAT)
Highlight:
- The company has not disclosed the project timeline, funding structure or expected financial contribution.
- However, the proposed investment represents one of Paras Defence’s largest expansion initiatives into semiconductor manufacturing.
What Happened ?
Paras Semiconductors has entered into an MoU with the Government of Madhya Pradesh to establish an advanced OSAT semiconductor facility in the state. The proposed plant will manufacture semiconductor devices for strategic applications, including sensors, optics and optronic systems, while creating advanced manufacturing capabilities within India.
The facility will be developed on a 50-acre site along the Ujjain–Indore Corridor and aligns with both the Madhya Pradesh Semiconductor Policy 2025 and the Government of India’s semiconductor mission.
key details
Why It Matters:
The investment strengthens Paras Defence’s transition from defence electronics into semiconductor manufacturing, an industry receiving significant policy support in India.
Key Highlights:
- Expands into the semiconductor value chain.
- Supports indigenous chip manufacturing.
- Strengthens India’s strategic technology capabilities.
- Aligns with the Atmanirbhar Bharat initiative.
- Supports future demand from defence, aerospace and high-performance electronics.
Project Overview:
The proposed facility will focus on advanced semiconductor packaging technologies while supporting future expansion into emerging semiconductor applications.
Project Snapshot
- Proposed investment of ₹6,200 crore.
- 50-acre land allocation by the Madhya Pradesh Government.
- OSAT facility for semiconductor assembly and packaging.
- Focus on semiconductor devices for sensors, optics and optronic systems.
- Potential future expansion into AI chips and advanced semiconductor technologies.
Business Impact:
The project expands Paras Defence’s addressable market by adding semiconductor manufacturing alongside its established defence and space businesses.
Investor Takeaways:
- Diversifies revenue opportunities beyond defence products.
- Creates long-term manufacturing capabilities in semiconductors.
- Strengthens technology integration across defence and electronics.
- Positions the company to benefit from India’s growing semiconductor ecosystem.
- Enhances opportunities for strategic partnerships and high-value manufacturing.
Industry Outlook:
India continues to accelerate investments across semiconductor manufacturing, packaging, testing and design to reduce import dependence and strengthen domestic supply chains.
The proposed facility is expected to support this ecosystem by creating employment, developing supplier networks and encouraging advanced manufacturing in Madhya Pradesh.
Risk Analysis
Key Risks:
- The project is currently at the MoU stage and remains subject to execution.
- Commercial production timelines have not been disclosed.
- Large capital investment may be phased over several years.
- Financial benefits will depend on successful implementation and customer acquisition.
- Future expansion into AI chips remains an opportunity rather than a confirmed plan.
Risk Level: Medium
Company Commentary
Managing Director Munjal Sharad Shah said the MoU marks an important milestone in building indigenous semiconductor capabilities and reflects the company’s commitment to supporting India’s technology self-reliance.
CEO Santosh Kumar added that the project will focus on strengthening domestic semiconductor manufacturing while building a globally competitive ecosystem for strategic applications.
Official Exchange Filing: Paras Defence & Space Technologies Limited
