Should you buy semiconductor stocks right now? Experts weigh in
What's the story
The Indian government's push to develop the semiconductor sector is gaining momentum, with faster approvals and attractive incentives for projects. However, experts warn that the industry is still nascent and requires significant work to achieve end-to-end capabilities. Sugandha Sachdeva, founder of SS WealthStreet, said India is emerging as a possible hub for chip design, assembly, and testing.
Market potential
Global semiconductor market approaching trillion-dollar valuation
Sachdeva emphasized that while India has a huge opportunity in semiconductors, the journey will be gradual and selective. She also noted that the global semiconductor industry is on track to become a trillion-dollar market. Seema Srivastava, Senior Research Analyst at SMC Global Securities, identified MosChip Technologies, Kaynes Technology, and CG Power as potential beneficiaries of this trend.
Stock performance
MosChip Technologies shows strong growth potential
Srivastava compared the three companies, saying MosChip Technologies has reported stellar growth with Q1 FY26 revenues up 69% YoY and net profit more than doubling. However, she warned that high valuations make the stock vulnerable if earnings fail to scale. On the other hand, Kaynes Technology offers execution stability backed by a strong balance sheet, low leverage, and investments in electronics manufacturing and OSAT facilities.
Investment strategy
CG Power investing heavily in OSAT facilities
CG Power, via its subsidiary CG Semi, is investing over ₹7,600 crore to set up large OSAT facilities in Gujarat. This could be India's first large-scale semiconductor assembly success. However, Srivastava warned that success will depend on utilization, yields, and timely execution due to the capital-intensive nature of OSAT. Sachdeva said well-chosen shares in this sector could deliver strong returns but only for patient investors who can withstand volatility and execution risk.
Investment advice
Target prices for recommended stocks
Sachdeva recommended MosChip Technologies as an attractive entry point in the ₹220-210 zone with a target of ₹310 over the medium to long term. She also suggested Kaynes Technology could move toward ₹9,800-10,000 levels with resistance near ₹7,480 mark. For CG Power, she advised buying on dips in the ₹690-695 band with a potential upside of up to ₹880-900.