Paras Semiconductors to Build India’s Next Big Chip Packaging Hub

Paras Defence’s semiconductor arm, Paras Semiconductors, will invest ₹6,200 crore to establish a greenfield OSAT (Outsourced Semiconductor Assembly and Test) facility in Madhya Pradesh’s Ujjain–Indore Corridor, marking a major boost to India’s chip packaging ecosystem. The state has allotted 50 acres of land for the project, which will focus on advanced packaging technologies and strategic applications.

In a press release filed with BSE and NSE, under SEBI Regulation 30 disclosures, Paras Semiconductors, the semiconductor arm of Paras Defence & Space Technologies Ltd., said that it has signed an MoU with the Government of Madhya Pradesh to set up a ₹6,200 crore advanced OSAT facility on 50 acres in the Ujjain–Indore Corridor.

The project aims to strengthen India’s semiconductor ecosystem, generate employment, and position Madhya Pradesh as a hub for next‑gen technologies. Leveraging expertise in optics and optronics, the company will focus on packaging and manufacturing devices for defence, sensor, and optical systems, with potential expansion into AI chips and advanced semiconductor technologies as market opportunities evolve.

This development comes within a few weeks after Adani Defence announced a ₹2,500 crore investment to establish a missile manufacturing hub in Shivpuri, Madhya Pradesh. 

Project Highlights

• Investment Size: ₹6,200 crore
• Location: Ujjain–Indore Corridor, Madhya Pradesh
• Land Allocation: 50 acres by the state government
• MoU Partners: Paras Semiconductors and MP State Electronics Development Corporation (MPSeDC)
• Announcement Date: July 22, 2026

Facility Capabilities

• Advanced Packaging: 2.5D/3D packaging, heterogeneous integration, hybrid bonding
• High-Density Solutions: Ultra-high-density fan-out packaging, chiplet integration
• Wafer-Level Processing: Wafer bumping, flip-chip assembly
• Testing & Reliability: Burn-in services, endurance screening for high-performance chips
• Applications: Defence electronics, AI compute, optical/optronic systems, sensor technologies

Commenting on the development, Munjal Sharad Shah, Managing Director, Paras Defence & Space Technologies Ltd., said: "The signing of this MoU marks a significant milestone in Paras Semiconductor's journey towards building indigenous semiconductor capabilities in India. We are honoured by the confidence and support extended by the Government of Madhya Pradesh and sincerely appreciate the state's progressive vision, industry-friendly policies and commitment to creating an enabling ecosystem for advanced manufacturing. The allocation of land on the Ujjain– Indore Corridor reflects the state's intent to foster long-term partnerships with industry. Through this investment, we look forward to contributing to Madhya Pradesh's industrial growth, creating high- value employment, nurturing a vibrant supplier ecosystem and supporting India's vision of becoming a globally competitive semiconductor manufacturing destination."

Commenting on the strategic significance of the project, Santosh Kumar, Chief Executive Officer, Paras Semiconductor, said: "The next phase of India's semiconductor journey will be defined not just by manufacturing capacity, but by the strength of the ecosystems we build around it. The Ujjain–Indore Corridor presents a unique opportunity to combine world-class infrastructure with a progressive policy environment to create a globally competitive semiconductor ecosystem. Ujjain, the sacred city of Mahakal and one of India's oldest centres of knowledge and civilisation, symbolises a remarkable convergence of heritage and the future. It is an honour for Paras Semiconductors to contribute to this transformation and be part of Madhya Pradesh's vision of building advanced semiconductor capabilities. Through this project, we aim to develop semiconductor devices for strategic applications, strengthen domestic technology capabilities and contribute to India's long-term technological self- reliance."

Strategic Importance

• Supports India Semiconductor Mission (ISM 2.0): Aligns with the Union Cabinet’s ₹1.275 lakh crore outlay
• Boosts Madhya Pradesh Semiconductor Policy 2025: Positions MP as a hub for semiconductors, electronics, AI, and data centres
• Employment Impact: Significant direct and indirect jobs in high-tech manufacturing
• Technology Expansion: Potential to move into AI chips and next-gen technologies

Risks & Challenges

• Execution Risk: Possible delays due to regulatory approvals and infrastructure readiness
• Global Competition: Competing with OSAT hubs in Taiwan, South Korea, and the US
• Supply Chain Dependencies: Reliance on raw materials and skilled workforce

Quick Comparison: OSAT Facilities in India

Facility	Investment	Location	Focus
Paras Semiconductors (Paras Defence)	₹6,200 crore	Ujjain–Indore, MP	Advanced packaging, AI chips, defence
Tata Electronics–ASML MoU	Multi-billion USD	Odisha	Lithography & packaging
3D Glass Solutions Odisha	₹1,943 crore	Bhubaneswar, Odisha	3D glass substrates, AI/defence
Micron Gujarat	$2.75 billion	Sanand, Gujarat	Memory packaging & testing

Outlook

This move by Paras Defence signals India’s aggressive expansion into semiconductor packaging, complementing fabrication projects in Gujarat and Odisha. If executed on schedule, Madhya Pradesh could emerge as a central hub for chip packaging and AI hardware, strengthening India’s position in the global semiconductor value chain.