Indian defence company to invest ₹500 cr in chip plant

New Delhi: An Indian defence company is investing Rs 500 crore to set up a new semiconductor production facility to tap into the domestic and export market, with production slated to start by the end of next year. Paras Defence and Space Technologies Ltd, which is already a leading player in defence optical and optronic systems, is looking to create a domestic hub for chiplet integration and advanced system-in-package technologies.

India currently relies only on imports for such technologies, with Israel being the leading supplier, followed by Europe. Paras Defence sees an annual domestic requirement of Rs 2,500 crore for sensors and chipsets as India is focused on an indigenisation drive, along with a major scaling up in the requirement of weapon systems.

"The main purpose is to develop and produce semiconductor devices for thermal imaging systems, which is going to be the first time by any in India. We are talking about 10,000 plus detectors every year and the minimum price of one detector with the electronics for basically cool thermal imaging application will be approximately 25 lakh," Munjal Sharad Shah, managing director, Paras Defence and Space Technologies Ltd, told ET.


The company is also confident that it will be more price competitive than overseas suppliers and has put together a scientific team that includes former employees of DRDO and ISRO. It also said that the entire effort is being done in house, with no foreign collaboration.

Paras is in discussions with state governments to identify a final site for the new plant and said it will also leverage central and state government schemes that promote setting up of semiconductor facilities. As per plans, the company will set up a 50,000 square feet facility in the first phase, which is planned to commence operations and start delivering by the end of 2027. The second phase, according to Shah, will involve a further expansion of 50,000 square feet.