In a major development for India’s domestic electronics manufacturing ecosystem, Paras Semiconductors Private Limited – a subsidiary of defence engineering firm Paras Defence and Space Technologies – has announced plans to construct a greenfield semiconductor facility in Madhya Pradesh.
The company formalised the ₹6,200 crore investment through a Memorandum of Understanding (MoU) signed with the Department of Science and Technology, operating via the MP State Electronics Development Corporation (MPSeDC).
Located within the strategically positioned Indore-Ujjain industrial region, the upcoming Outsourced Semiconductor Assembly and Test (OSAT) facility will focus on next-generation integrated circuit (IC) packaging technologies. The joint effort combines public administrative support with private high-tech engineering expertise to build a self-reliant chip ecosystem in central India.
Advanced Capabilities and Core Technologies
Semiconductor packaging is a crucial final stage in chip production, turning raw silicon wafers into sealed, functional microchips ready for deployment in consumer electronics, automotive systems, defence hardware and AI servers.
The proposed semiconductor packaging facility will deliver a suite of specialised packaging and testing services organised across four core technical focus areas.
In the realm of advanced packaging, the facility is designed to provide 2.5D and 3D advanced packaging along with 3D heterogeneous integration. To support high-density architecture, its capabilities encompass ultra-high-density fan-out packaging and advanced chiplet integration.
On the wafer-level processing front, the plant will handle essential precision steps, including wafer bumping, flip-chip assembly and hybrid bonding. Finally, to maintain strict quality assurance standards, the facility will offer comprehensive testing, reliability screening, and burn-in services to ensure component endurance and performance.
These advanced methodologies allow multi-chip systems to operate with higher power efficiency and reduced latency, meeting the escalating hardware demands driven by artificial intelligence and high-performance computing.
Madhya Pradesh Emerges as a High-Tech Hub
The venture by Paras Semiconductors represents a broader push to transform Madhya Pradesh into an emerging hub for digital infrastructure and hardware manufacturing.
The state recently attracted major tech commitments, including a $2 billion (around ₹19,000 crore) investment from Spain-based Submer Group announced during the MP Tech Growth Conclave 3.0. Submer’s project focuses on data centre liquid-cooling technologies, expected to create nearly 5,000 direct jobs.
Coupled with recent partnerships involving Google Play India, MPSeDC’s proactive policy support is positioning the Indore-Ujjain industrial cluster as an attractive destination for capital-intensive tech investments.
Strengthening Domestic Resilience
Historically, Indian chip design firms depended heavily on overseas foundries and OSAT plants in East Asia for final assembly and testing. Projects like Paras’ new facility significantly reduce supply chain vulnerabilities by retaining high-value manufacturing stages within national borders.
Following the regulatory disclosure of the MoU, market reactions remained measured, with Paras Defence stock hovering near ₹1,214. However, analysts note that entering advanced OSAT manufacturing provides Paras Defence with long-term strategic synergy across its aerospace, defence electronics and commercial optics business lines.
Groundwork and infrastructure preparation in the Indore-Ujjain corridor are expected to commence following final environmental and industrial site clearances.
