Paras Defence arm to set up ₹6,200 crore semiconductor packaging facility in Madhya Pradesh

Paras Defence and Space Technologies' subsidiary, Paras Semiconductors Private Limited, will invest around ₹6,200 crore to set up a greenfield advanced semiconductor packaging facility in Madhya Pradesh, the company said in a filing on Wednesday.

The company has signed a memorandum of understanding (MoU) with the Department of Science and Technology, acting through the MP State Electronics Development Corporation (MPSeDC), for the project.

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The proposed Outsourced Semiconductor Assembly and Test (OSAT) facility will be located in the Indore-Ujjain region and will focus on advanced integrated circuit (IC) packaging technologies.

After the announcement, shares of Paras Defence and Space Technologies fell 0.7% to intraday low of ₹1,214.

Under the deal, Paras Semiconductors and MPSeDC will collaborate by combining their expertise and resources to facilitate the establishment of the project.

According to the company, the facility will undertake advanced packaging operations, including 3D heterogeneous integration, 2.5D and 3D advanced packaging, hybrid bonding, ultra-high-density fan-out packaging, chiplet integration, wafer bumping, flip-chip assembly, testing and reliability services.

The project is intended to strengthen India's semiconductor packaging capabilities as the country expands its domestic electronics manufacturing and chip ecosystem.

Madhya Pradesh ramps up chip ambitions

The investment adds to a series of semiconductor and digital infrastructure commitments announced for Madhya Pradesh in recent months. Earlier this week, Spain-based technology company Submer Group announced plans to invest $2 billion (around ₹19,000 crore) in the state's semiconductor ecosystem, a project expected to create nearly 5,000 direct jobs.

Also Read: Spain's Submer Group to invest $2 billion in semiconductor industry in Madhya Pradesh

The investment was announced at the MP Tech Growth Conclave 3.0: GCC - Data Centres and Semiconductors, where Submer said Madhya Pradesh was well positioned to benefit from the rapid expansion of AI infrastructure. As part of the event, the state also exchanged an MoU with Google Play India and the MP State Electronics Development Corporation (MPSeDC).

Submer has previously outlined plans to establish a manufacturing facility in India for its advanced liquid cooling systems for data centres, with the country serving as a production and export hub for Asia. The company has also said it intends to partner with OEMs and ODMs and support skill development programmes to build a workforce for next-generation data centres.

Paras Defence's proposed OSAT facility is expected to strengthen India's semiconductor packaging capabilities as the country seeks to expand domestic electronics manufacturing and build a more resilient semiconductor supply chain.