Semiconductor Stocks: Why Lower Tariffs Could Be a Game Changer for India’s Semiconductor Industry?
Semiconductor Stocks: The Indian government has been actively promoting its Make in India initiative across various industries, and the semiconductor sector is no exception. With global demand for semiconductors surging, India has a golden opportunity to become a key player in the global supply chain. However, high import tariffs on semiconductor manufacturing equipment and raw materials could slow down this progress.
Recently, John Neuffer, President and CEO of the US Semiconductor Industry Association (SIA), emphasized that reducing or eliminating tariffs on semiconductor manufacturing in India could help the country become a major hub for chip production. In an interview, Neuffer pointed out that India needs to offer zero tariffs and adopt more trade-friendly policies to attract global semiconductor firms.
Why Lower Tariffs Matter?
Semiconductor manufacturing is a capital-intensive industry that requires cutting-edge technology, advanced machinery, and highly skilled labor. While India has made strides in chip design, actual manufacturing still lags behind due to high costs and import duties on semiconductor equipment.
Neuffer noted that the United States already receives zero-tariff treatment from major semiconductor supply chain partners such as Taiwan, South Korea, and Japan, but India does not offer the same incentive. Lowering or eliminating tariffs could encourage foreign direct investment (FDI), bringing in major chipmakers and fostering local manufacturing.
Additionally, the US-China trade war and potential 100% tariffs on semiconductor imports from Taiwan proposed by the Trump administration could disrupt global supply chains. This scenario opens a strategic window for India to step up and position itself as an alternative semiconductor hub.
India’s Growing Semiconductor Industry
India’s semiconductor market is expected to grow significantly over the next decade. According to SIA, the global semiconductor industry saw 20% growth in 2024 and is forecasted to grow by 11% in 2025. The US alone aims to triple its advanced chip manufacturing capacity by 2032, contributing to 30% of the world’s most advanced chips.
To compete on a global scale, India must focus on developing a strong semiconductor ecosystem. This includes:
- Reducing tariffs on semiconductor manufacturing equipment to attract global chip manufacturers.
- Investing in skill development programs to create a talent pool for high-tech chip manufacturing.
- Strengthening research & development (R&D) facilities to drive innovation in semiconductor technology.
- Encouraging private and public sector partnerships to fund and develop large-scale semiconductor fabrication plants (fabs).
Indian Semiconductor Stocks to Watch
As India moves towards becoming a semiconductor manufacturing hub, several Indian companies stand to benefit from this transformation. Here are five Indian stocks that could see significant growth as semiconductor manufacturing expands:
| Company | Market Cap (Rs. Crores) | Last Traded Price (Rs.) | Change (%) | Key Business Focus |
|---|---|---|---|---|
| RIR Power Electronics | 1,613.25 | 2,102.30 | -5.00% | Power semiconductor devices |
| Kaynes Technology India | 26,480.30 | 4,136.85 | -1.11% | Electronics manufacturing & IoT solutions |
| CG Power & Industrial Solutions | 88,457.78 | 578.60 | +0.29% | Power generation & semiconductor assembly |
| Moschip Technologies | 3,512.97 | 183.85 | -2.57% | Semiconductor & AI/ML engineering |
| ASM Technologies | 1,514.74 | 1,286.70 | +9.16% | Engineering & R&D solutions |
Final Thoughts
India has a once-in-a-generation opportunity to establish itself as a global semiconductor powerhouse. By implementing zero tariffs on semiconductor manufacturing equipment, India can attract major investments from global semiconductor giants, reduce dependency on imports, and boost its domestic manufacturing sector.
With the government’s push for self-reliance and global players eyeing India as a potential alternative to China and Taiwan, the country is well-positioned to redefine its role in the global semiconductor supply chain. Investors should keep a close watch on semiconductor-related stocks, as this sector is poised for exponential growth in the coming years.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.