SYNOPSIS: India’s ISM 2.0 boosts semiconductor ambitions, with rising capex and localisation driving opportunities across gases, engineering R&D, and specialty chemicals segments positioned to benefit from ecosystem expansion without manufacturing chips directly.
Semiconductors quietly power almost every aspect of modern life, from smartphones and computers to cars, telecom, defence systems and AI. As digital adoption accelerates, chips have become the invisible engine behind economic growth and technological advancement. Recognising this strategic importance, India has been steadily building its semiconductor ecosystem under India Semiconductor Mission (ISM) 1.0 – strengthening chip design capabilities while also laying the groundwork for fabrication, assembly and testing infrastructure across the country.
This progress reflects the broader vision of Aatmanirbhar Bharat and India’s transition from policy formulation to production readiness. Building on this momentum, India is moving to ISM 2.0 to further strengthen the country’s position as a reliable and competitive participant in the global semiconductor network.
The Union Budget 2026-27 marked an important step for the formal announcement of ISM 2.0. This new phase signals a clear policy push to deepen domestic semiconductor capabilities at a time when chips underpin every critical digital and industrial system.
ISM 2.0 will focus on producing semiconductor equipment and materials in India, designing full-stack Indian semiconductor intellectual property, and fortifying both domestic and global supply chains. An allocation of Rs. 1,000 crore has been made for ISM 2.0 for FY27, with a strong focus on industry-led research initiatives and training centres to drive technology development and create a future-ready skilled workforce.
Against this backdrop, below are three stocks that are not directly engaged in manufacturing chips but are strategically positioned to benefit from the rapid expansion of the semiconductor and electronics ecosystem in India.
Linde India Limited
With a market cap of Rs. 58,068.3 crores, the stock closed in the green at Rs. 6,808.8 on Friday, up by around xx percent on BSE. Linde India Limited is primarily engaged in the business of manufacturing industrial and medical gases and the construction of cryogenic and non-cryogenic air separation plants.
While it does not manufacture chips, it supplies technology of choice among many semiconductor manufacturers, with its innovative technologies and solutions backed by a global supply chain to help achieve smarter, lower-cost, and more sustainable semiconductor manufacturing operations.
For over two decades, the company’s SPECTRA® lithography gases have supported semiconductor patterning. Backed by expertise in rare gases, halogens, blending technologies, advanced analysis and cylinder treatment, Linde ensures high stability and uptime for lithography equipment.
The company has long been a trusted partner to the excimer laser industry, which forms the backbone of deep ultraviolet (DUV) photolithography. Its gases were used in the early development of lasers for lithography and continue to be widely used today in the semiconductor industry. Its customer base includes major global laser, stepper, and scanner manufacturers, as well as some of the world’s largest semiconductor manufacturers.
As the industry transitions toward next-generation extreme ultraviolet (EUV) lithography, demand dynamics are evolving further. Large amounts of hydrogen are required to continuously clean the commercial light sources, which use liquid tin as a lasing medium. Linde offers a comprehensive portfolio of bulk and on-site hydrogen solutions, positioning itself to support growing demand in advanced semiconductor manufacturing.
L&T Technology Services Limited
With a market cap of Rs. 36,024 crores, the stock closed in the green at Rs. 3,398.65 on friday, up by around xx percent on BSE. L&T Technology Services Limited (LTTS) is a leading global pure-play engineering research and development (ER&D) services company. ER&D services are a set of services provided by Manufacturing, Industrial products, Medical Devices Technology, Telecom and Hitech, Process Engineering companies to help them develop and build products, processes and infrastructure required to deliver products and services to their end customers.
Semiconductor equipment manufacturers and advanced manufacturing companies often outsource engineering and design services. With its strong domain expertise and global client relationships, LTTS is positioned to benefit indirectly from rising semiconductor capex. As chipmakers and equipment suppliers expand capacity and upgrade technologies, the need for engineering innovation, system integration and product lifecycle support creates opportunities for ER&D players like LTTS to participate in the broader semiconductor growth cycle.
Acutaas Chemical Limited
With a market cap of Rs. 17,253 crores, the stock closed in the green at Rs. 2,107.35 on Friday. Acutaas Chemicals Limited, formerly known as Ami Organics Limited, is a specialty chemicals manufacturer serving a wide range of industries, including pharmaceuticals, semiconductors, battery chemicals, personal care, agrochemicals, and fine chemicals. Its core strength lies in the research-driven development and manufacturing of advanced pharmaceutical intermediates used in both regulated and generic APIs, as well as intermediates for New Chemical Entities (NCEs).
It has aggressively diversified into the semiconductor supply chain, primarily through the acquisition of Baba Fine Chemicals, required for specific steps in chip manufacturing. In addition, the company’s offerings include parabens and their formulations, methyl salicylate, and niche key starting materials (KSMs) used in cosmetics and other industrial segments.
Mr. Naresh Patel, Executive Chairman and Managing Director of the company, noted that the company continues to strengthen its core pharmaceutical intermediates business by adding CMO/CDMO opportunities, while also reinforcing its long-term foundation by scaling its battery chemicals and semiconductor chemicals verticals. These segments, which are currently under active capital investment, are progressing steadily toward scale and are expected to evolve into independent, self-sustaining growth engines over the next three years, contributing meaningfully to overall topline growth.
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