Paras Defence and Space Technologies Limited announced it would set up the semiconductor unit with an investment of Rs 6,200 crore (about $644 million). Its wholly-owned subsidiary, Paras Semiconductors, has signed an MoU with the Madhya Pradesh State Electronics Development Corporation (MPSeDC) to build an Outsourced Semiconductor Assembly and Test facility (OSAT) for chip packaging and testing.
Paras Defence is a private sector defence engineering company that specialises in designing, manufacturing, and testing high-precision products for the defence and space sectors. The semicon unit will be built on a 50-acre site along the Indore–Ujjain corridor in Madhya Pradesh.
An OSAT plant packages, assembles and tests foundry-made silicon to turn it into the final product of semiconductor chips. According to Reuters, the facility will undertake advanced chip packaging operations including 3D heterogeneous integration and 2.5D/3D advanced packaging, and test the packaged chips for reliability.
The development is in line with the Union Cabinet's approval of a Rs 1.27 lakh crore budget for the India Semiconductor Mission (ISM 2.0). It is a six-year programme that aims to accelerate the country's semiconductor ecosystem.
However, according to Moneycontrol.com, the shares of Paras Defence & Space Technologies traded lower in early trade on Wednesday after the company announced the plan to set up the facility.
Semiconductor chips are vital for defence systems today. Their demand rises in accordance with the increase in technological advancements. These chips are made from silica. While raw silica is available worldwide, high-purity quartz (crucial for semiconductors) is rare. In India, this high-purity quartz is primarily available in Rajasthan and Andhra Pradesh.
