Paras Defence and Space Technologies is making a major push into India’s semiconductor industry with plans to invest ₹6,200 crore in a greenfield Outsourced Semiconductor Assembly and Test (OSAT) facility in Madhya Pradesh. The project will be developed by its wholly owned subsidiary, Paras Semiconductors Private Limited, following the signing of a Memorandum of Understanding (MoU) with the Madhya Pradesh government’s Department of Science and Technology through the MP State Electronics Development Corporation (MPSeDC).
The proposed facility will be located in the Indore-Ujjain region and focus on advanced semiconductor packaging technologies, supporting India’s efforts to build a domestic chip manufacturing ecosystem under the Semicon India initiative. The investment also marks one of the largest commitments by an Indian defence company in the semiconductor value chain.
Paras Defence Expands into Advanced Chip Packaging
Rather than manufacturing semiconductor wafers, the new plant will operate as an OSAT (Outsourced Semiconductor Assembly and Test) facility, where fabricated silicon wafers are assembled, packaged, tested, and prepared for use in electronic devices.
The facility is expected to support applications across:
- Defence and aerospace.
- Artificial intelligence (AI).
- Automotive electronics.
- Consumer electronics.
- Telecommunications.
- Industrial automation.
Project Overview
| Item | Details |
|---|---|
| Company | Paras Defence and Space Technologies |
| Subsidiary | Paras Semiconductors Pvt. Ltd. |
| Investment | ₹6,200 crore |
| Facility Type | Greenfield OSAT (Chip Packaging & Testing) |
| Location | Indore-Ujjain region, Madhya Pradesh |
| Partner | MP State Electronics Development Corporation (MPSeDC) |
Advanced Packaging Technologies Planned
According to the company, the plant will incorporate next-generation semiconductor packaging capabilities that are increasingly important for AI and high-performance computing chips.
These include:
- 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.
Key Capabilities
| Technology | Purpose |
|---|---|
| 3D heterogeneous integration | Combines multiple chips into a single package |
| Chiplet integration | Enables modular chip design |
| Hybrid bonding | Improves performance and power efficiency |
| Flip-chip assembly | High-performance chip interconnection |
| Reliability testing | Ensures quality before deployment |
Strengthening India’s Semiconductor Ecosystem
The investment aligns with India’s strategy to reduce dependence on imported semiconductor packaging services and develop a complete domestic semiconductor supply chain.
OSAT facilities play a critical role by:
- Packaging chips manufactured at semiconductor foundries.
- Conducting electrical and reliability testing.
- Preparing chips for commercial deployment.
- Supporting advanced electronics manufacturing.
The project is expected to contribute to India’s ambitions of becoming a global semiconductor hub while strengthening supply chains for strategic industries, including defence and electronics.
Boost for Madhya Pradesh’s Chip Ambitions
The project further strengthens Madhya Pradesh’s emerging position in India’s semiconductor sector.
The state has recently attracted multiple investments in semiconductor and digital infrastructure, with the government actively promoting the Indore-Ujjain corridor as a destination for chip manufacturing, packaging, AI infrastructure, and electronics production.
Expected Impact
| Area | Potential Benefit |
|---|---|
| Semiconductor ecosystem | Expands domestic packaging capacity |
| Employment | Significant direct and indirect job creation |
| Defence manufacturing | Supports strategic electronics supply chains |
| Electronics industry | Reduces dependence on overseas OSAT services |
| State economy | Boosts high-tech manufacturing investment |
Strategic Diversification Beyond Defence
Paras Defence has traditionally focused on defence optics, electronics, space technologies, and defence engineering. The semiconductor investment represents a strategic diversification into a high-growth sector with applications across both civilian and defence markets.
By combining its expertise in advanced electronics with semiconductor packaging, the company aims to participate in India’s rapidly expanding demand for AI processors, automotive chips, communication devices, and secure defence electronics.
Looking Ahead
Paras Defence’s proposed ₹6,200 crore investment in an advanced OSAT facility marks a significant milestone in India’s semiconductor journey. The project will add sophisticated chip packaging and testing capabilities to the country’s growing electronics manufacturing ecosystem while supporting strategic sectors such as defence, AI, telecommunications, and automotive technology.
If completed as planned, the facility could become one of India’s most advanced semiconductor packaging plants and strengthen the country’s position in the global semiconductor value chain. It also underscores the increasing role of domestic defence companies in building critical technology infrastructure beyond traditional military manufacturing, aligning with India’s broader goal of achieving greater self-reliance in semiconductors and advanced electronics.
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