Semiconductor Stocks Gain As India To Get First National Security Fabrication Plant

Shares of Indian semiconductor companies jumped on Monday after the country signed a pact with the US to get its first-ever national security semiconductor fabrication plant.

The plant, under a transformative collaboration with the US, will produce chips for use in military hardware in both the countries, as well as in critical telecommunication networks and electronics.

The project was announced following talks between Prime Minister Narendra Modi and US President Joe Biden in Wilmington on Saturday.

It will not only become India's first, but one of the world's first multi-material fab for national security, people aware of the matter told PTI.

The Fab, to be known as 'Shakti', will focus on three essential pillars for modern war fighting—advanced sensing, advanced communications and high voltage power electronics, the news agency reported.

Quad leaders welcomed finalisation of memorandum of cooperation for the Semiconductor Supply Chains Contingency Network, according to the joint fact sheet. The contingency network will facilitate collaboration in addressing supply chain risks.

Shares of Hind Rectifiers Ltd. rose the most, by 5%, in early trade, followed by MosChip Technologies Ltd. and Bharat Bijlee Ltd.

MosChip Technologies stock rose as much as 3.86% during the day before paring gains to trade 1.9% higher at Rs 260 apiece as of 9:25 a.m. Shares of ASM Technologies Ltd. rose as much as 2.55% during the day to Rs 1,737 apiece on the NSE. They were trading 0.7% higher at Rs 1,705 apiece as of the same time.

Bharat Bijlee Ltd. stock rose as much as 2.19% before paring gains to trade 1% higher at Rs 4,644 apiece at 9:25 a.m.

This compares to a 0.4% rise in the benchmark NSE Nifty 50 as of 9:25 a.m.