Paras Defence and Space Technologies Ltd, a prominent Indian defence firm, has announced a substantial investment of ₹500 crore to establish a cutting-edge semiconductor production facility, reported Manu Pubby of ET News.

This initiative aims to address critical gaps in domestic manufacturing and position India as a key player in the global supply chain for advanced defence electronics.

The new plant will specialise in chiplet integration and advanced system-in-package technologies, areas where India currently depends entirely on imports. Israel leads as the primary supplier, with Europe following closely, highlighting the strategic importance of this self-reliance push.

Paras Defence, already renowned for its expertise in defence optical and optronic systems, anticipates capturing a significant slice of the domestic market. Officials estimate an annual requirement of ₹2,500 crore for sensors and chipsets, driven by India's aggressive indigenisation drive and the ramp-up in weapon systems procurement.

At the heart of the project lies the development of semiconductor devices tailored for thermal imaging systems—a first for any Indian company. Munjal Sharad Shah, the managing director of Paras Defence, explained that the facility targets production of over 10,000 detectors annually. Each detector, complete with electronics for cooled thermal imaging applications, is projected to cost around ₹25 lakh.

Shah emphasised the company's competitive edge, asserting that domestically produced units will undercut overseas prices. This cost advantage stems from in-house development, avoiding foreign collaborations and leveraging a skilled team that includes ex-employees from DRDO and ISRO.

The firm is actively negotiating with various state governments to secure an optimal location for the plant. It plans to tap into both central and state incentives designed to bolster semiconductor manufacturing, accelerating the project's rollout.

In its initial phase, the facility will span 50,000 square feet, with operations slated to begin by the end of 2027. Production will initially focus on domestic defence needs, but Paras eyes export potential as well, aligning with broader national goals for technology sovereignty.

A second phase will double the capacity to another 50,000 square feet, scaling up output to meet surging demands from India's military modernisation programmes. This expansion underscores the company's long-term vision in a sector poised for exponential growth.

This move comes amid heightened geopolitical tensions and India's focus on reducing import dependencies in critical technologies. By indigenising high-end chip production, Paras not only bolsters national security but also contributes to the 'Make in India' ethos.

Stakeholders view the initiative as a game-changer for defence electronics. Successful execution could inspire similar ventures, fostering a robust ecosystem for semiconductor innovation tailored to strategic applications.

Based On ET News Report