This semiconductor stock has nearly doubled thus far in the month of June

MosChip Technologies share price has rallied 44% in 4 days after the MeitY approved its application under Semiconductor DLI scheme

Shares of MosChip Technologies hit a new high of Rs 251.80, surging nearly 13 per cent on the BSE in Wednesday's intraday trade amid heavy volumes, on healthy business outlook. Thus far in the month of June, the stock of the semiconductor and system design services company has nearly doubled, zooming 97 per cent from a level of Rs 128.10 on May 31, 2024.

At 10:19 AM, MosChip Technologies was trading 7 per cent higher at Rs 239 as compared to 0.05 per cent decline in the BSE Sensex index. As many as 4.62 million shares, representing 2.5 per cent of the total equity of the company, have already changed hands on the BSE. On an average, 4.6 million shares traded on the counter in the past two weeks, BSE data shows.

With over 1,200 engineers spread across Silicon Valley-USA, Hyderabad, Bengaluru, Ahmedabad and Pune, MosChip offers a comprehensive range of solutions including turn-key digital and mixed-signal ASICs, design services, SerDes IP, and embedded system design. With a rich legacy spanning two decades, MosChip has successfully developed and delivered millions of connectivity ICs worldwide.

Besides, the stock has surged 44 per cent in the past four trading days, after the company, on June 13, announced that the Ministry of Electronics and Information Technology, Government of India (MeitY) has approved its application under the Government of India's Semiconductor Design-Linked Incentive (DLI) scheme for the development of a smart energy meter IC for India and overseas markets.

Ministry of Electronics and Information Technology announced the Design Linked Incentive (DLI) scheme to offset the disabilities in the domestic industry involved in semiconductor design to not only move up in the value chain but also strengthen the semiconductor chip design ecosystem in the country.

The Design Linked Incentive (DLI) scheme aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s) over a period of 5 years.

MosChip Technologies said the smart energy meter IC market is expected to grow at 7 per cent CAGR reaching ~60 million units in India and ~2 billion units in the Overseas Global Market by 2028.

"DLI is an excellent policy initiative by the Government of India that helps Indian companies build IP cores, SoCs, and Systems and develop world-class semiconductor products for domestic and overseas markets to realize the vision of Atmanirbhar Bharat in the semiconductor industry," the company said.

Semiconductors are the key components in every electronic system that includes smartphones, personal computers, Laptops, Communication and networking systems, Medical equipment and Automobiles. Emerging technologies and applications in the areas of 5G communications and Artificial intelligence (AI) are further fuelling the growth.

Semiconductor industry will benefit from the ongoing innovation and development in connectivity, data centres, communications, automotive, safety & security, infotainment, navigation, home automation, wearable devices, etc. and will continue to see growth in the coming decades.

Smartphones are expected to command an important part of the semiconductor market going forward, especially as these devices become more advanced and able to support technologies such as augmented reality (AR), virtual reality (VR), 5G, and AI. Semiconductors for use in servers and data centres are set to become an even more important opportunity, with semiconductor innovation required to support cloud data centres and the rise in edge computing, the company said.