Paras Defence enters chip race

Paras Defence is stepping into the semiconductor space with a new subsidiary and the stock ended more than 5%. 

The deets: the company has set up Paras Semiconductors Pvt Ltd, where it will hold a 70% stake. The new arm plans to build a chip packaging and testing facility in India.

In simple terms, this unit won’t manufacture chips from scratch. Instead, it will assemble and test advanced chips, a crucial step before they are used in devices. 

This is called OSAT (Outsourced Semiconductor Assembly and Testing).

The focus will be on high-end applications like artificial intelligence, high-performance computing, networking and data centres. 

Semiconductor boost in India: India is going all in on chips. Just recently, Prime Minister Narendra Modi inaugurated Micron’s semiconductor facility in Gujarat, marking a major step in building India’s chip ecosystem.

The government has rolled out massive incentives under its semiconductor mission to attract global players.

The reason is simple. Chips power everything from smartphones, cars, defence systems to AI servers. After global supply shocks and rising geopolitical tensions, countries want more local control over chip production.