Paras Defence’s semiconductor arm, Paras Semiconductors Private Limited, has signed an MoU with the Madhya Pradesh government to establish a ₹6,200 crore advanced semiconductor packaging facility on the Ujjain–Indore Corridor, marking a major expansion of India’s chip ecosystem.

The project will focus on cutting-edge OSAT technologies and is expected to generate significant employment while strengthening India’s strategic semiconductor capabilities.

Paras Defence and Space Technologies announced that its subsidiary will set up a greenfield Outsourced Semiconductor Assembly and Test facility in Madhya Pradesh. The agreement was signed with the Department of Science and Technology through the MP State Electronics Development Corporation. 

The state has allotted fifty acres of land on the Ujjain–Indore Corridor for the project, which is strategically located to support advanced manufacturing and next-generation technologies.

The proposed facility will undertake advanced packaging operations including 3D heterogeneous integration, 2.5D and 3D advanced packaging, hybrid bonding, ultra-high-density fan-out packaging, chip-let integration, wafer bumping, flip-chip assembly, testing and reliability services.

These capabilities are intended to strengthen India’s semiconductor packaging ecosystem and reduce reliance on imports.

Paras Semiconductors has been established to build advanced semiconductor capabilities for strategic and high-performance sensor applications. Leveraging its parent company’s expertise in optics and optronics, the facility will produce semiconductor devices for sensor technologies, optical and optronic systems, and other strategic applications.

The company has also indicated potential expansion into AI chips and other advanced semiconductor technologies as market opportunities evolve.

The announcement initially saw Paras Defence shares fall 0.7% to an intraday low of ₹1,214, but later reports confirmed that the stock surged by 11% following the signing of a memorandum of understanding with Korea’s Green Optics, reflecting investor confidence in the company’s semiconductor ambitions.

The project aligns with Madhya Pradesh’s Semiconductor Policy 2025 and broader vision of developing an integrated ecosystem for semiconductors, electronics manufacturing, artificial intelligence, and data centres.

The Ujjain–Indore Corridor is emerging as a key technology and manufacturing hub, supported by progressive policy initiatives, infrastructure, industry-academia collaboration, research, and skill development programs. The facility is expected to catalyse ancillary industries, encourage MSME growth, and create opportunities for highly skilled talent.

Earlier this week, Spain-based Submer Group announced plans to invest $2 billion (around ₹19,000 crore) in Madhya Pradesh’s semiconductor ecosystem, expected to create nearly 5,000 direct jobs. Submer intends to establish a manufacturing facility in India for advanced liquid cooling systems for data centres, positioning the country as a production and export hub for Asia.

The state also exchanged an MoU with Google Play India and MPSeDC at the MP Tech Growth Conclave 3.0, reinforcing its ambitions in AI and digital infrastructure.

Munjal Sharad Shah, Managing Director of Paras Defence & Space Technologies, described the MoU as a significant milestone in building indigenous semiconductor capabilities.

He emphasised the confidence and support extended by the Madhya Pradesh government and highlighted the state’s progressive vision and industry-friendly policies. Santosh Kumar, CEO of Paras Semiconductors, noted that the next phase of India’s semiconductor journey will be defined not just by manufacturing capacity but by the strength of ecosystems built around it.

The Paras Defence project is expected to contribute significantly to Madhya Pradesh’s industrial landscape, foster innovation-led manufacturing, and reinforce India’s long-term semiconductor ambitions. It will also strengthen India’s position in the global semiconductor supply chain by creating advanced packaging capabilities and supporting strategic applications.

Agencies