Paras Semiconductors, the semiconductor arm of Paras Defence & Space Technologies, has proposed investing around ₹6,200 crore to establish an advanced semiconductor assembly and testing facility in Madhya Pradesh, marking one of the state’s largest proposed investments in the semiconductor sector.
The greenfield project will focus on Outsourced Semiconductor Assembly and Test (OSAT) services, covering advanced chip packaging, assembly, testing and reliability. If implemented, the facility is expected to create more than 2,500 direct jobs, while supporting additional employment through component suppliers and ancillary industries.
The proposal comes as Indian states compete to attract semiconductor investments under the Centre’s broader push to strengthen domestic electronics manufacturing and reduce dependence on imported chip supply chains.
According to the proposal, the facility is expected to be located in the Indore-Ujjain industrial corridor. Reports indicate that around 50 acres have been identified for the project, with DMIC Vikram Udyogpuri Phase-2 near Ujjain emerging as the preferred location.
The Madhya Pradesh government has signed a memorandum of understanding (MoU) with Paras Semiconductors through the state’s Department of Science and Technology and the Madhya Pradesh State Electronics Development Corporation (MPSeDC). Chief Minister Mohan Yadav was present during the signing and described the project as part of the state’s strategy to attract investments in semiconductors and advanced manufacturing.
The proposed facility is designed to support next-generation semiconductor packaging technologies. These include 2.5D and 3D advanced packaging, hybrid bonding, chiplet integration, flip-chip assembly, wafer bumping and ultra-high-density fan-out packaging. Such technologies have become increasingly important as chipmakers shift toward chiplet-based architectures to improve computing performance, power efficiency and manufacturing flexibility.
Unlike wafer fabrication plants, OSAT facilities package, assemble and test semiconductor chips before they are integrated into electronic products. As global demand for AI processors, automotive electronics and high-performance computing chips grows, advanced packaging has become a strategic segment of the semiconductor value chain.
For Paras Defence, the project represents a significant expansion beyond its traditional defence and space business. The company is positioning the proposed facility to serve strategic and high-performance applications, including sensor devices, photonics and optronic systems, alongside broader semiconductor packaging requirements.
The investment also aligns with Madhya Pradesh’s efforts to emerge as a manufacturing hub for electronics and semiconductors. State authorities have introduced incentives under their semiconductor policy to attract companies involved in chip manufacturing, packaging and related technologies.
If approved and executed, the OSAT facility could strengthen India’s semiconductor ecosystem by expanding domestic packaging capabilities and encouraging the development of a regional supplier network. Industry observers view advanced packaging as a critical part of India’s semiconductor ambitions, offering a faster route into the global chip supply chain while complementing the country’s longer-term plans for semiconductor fabrication.
