Semiconductor companies like Nvidia, Broadcom, and AMD have created significant wealth for investors over the last decade. An Indian company that entered the semiconductor space in April 2024, started at just Rs. 15 and is now priced at ₹6,131. At a 1285x price-to-equity (P/E) ratio, RRP Semiconductor sure attracts attention.
To put this in perspective, Nvidia today stands at around 50x price-to-equity.
India’s semiconductor story may have only just begun. But as it develops, where is the value being captured?
Finding value in the Indian semiconductor landscape
RRP Semiconductor is still in the early stage of its semiconductor journey. It is assembling the pieces of the semiconductor manufacturing process, collaborating with HMT Zurich for ASIC IP, AMB Taiwan for memory module IP, and US-based Deca Technologies to produce parts for the Apple iPhone.
But to derive value from these collaborations, RRP has to build a ₹24,000 crore semiconductor manufacturing facility.
Today, India has 10 semiconductor units under development, including 2 fabs and 8 ATMP (assembly, testing, marking, and packaging) facilities. While the industry shows potential, it is yet to deliver value in the form of sales, factory efficiency, and ROI.
The Indian semiconductor story is moving forward, but it has some distance to cover compared with the global semiconductor markets of the US, China, Europe, Taiwan, and South Korea.
Capturing the value of the entire semiconductor supply chain
Meanwhile, a handful of companies dominate the global semiconductor supply chain. And yet no single company can make a semiconductor chip end-to-end. They rely on each other to complete the process from designing to manufacturing.
UK-based ARM Holdings designs and licenses chip architecture used in most of the world’s mobile phones and many embedded devices. Taiwan-based TSMC is the world’s largest chip manufacturer with 65% market share. Behind its position is its expertise in manufacturing 3 and 5-nanometer chips.
Companies such as Apple, Qualcomm, Nvidia and Huawei build their chips on ARM architecture and depend on TSMC for manufacturing.
TSMC, in turn, depends on Dutch-based ASML Holdings, the sole producer of extreme ultraviolet (EUV) lithography machines used for manufacturing advanced chips. In fact, all chip manufacturers – TSMC, Samsung, and Intel – use ASML’s equipment.
Semiconductor stocks harness the power of AI
The US has strength in designing advanced chips that power data centres, mobile phones, and PCs. Nvidia has become one of the most valuable companies with a market cap of $4.29 trillion, driven by a sharp rally in the last 2.5 years. This rally was supported by the AI wave, with its data centre revenue CAGR at 108% over 5 years. From ChatGPT to Gemini, many AI models have been trained on Nvidia’s AI data centre GPU.
ARM Holdings, TSMC, and ASML have also gained from these shifts. The AI trend that began in 2023 with Nvidia reached the supply chain, with TSMC stock up 183%, ASML up 70%, and ARM up 141%.
TSMC is now earning 60% of its revenue from high-performance computing chips. ARM saw a sharp increase in the number of customers using ARM-based chips in the data centre.
The above four companies have a consolidated market value of $6.2 trillion in the US stock exchanges, where most of the global semiconductor supply chain players are listed.
Global supply chain and India’s semiconductor plans
These companies are not just catering to the existing players but are also contributing to India’s semiconductor and AI efforts.
Indian companies like Jio, Tech Mahindra, Infosys, Wipro, Yotta, and startups like Flipkart, Zoho, and CoRover.ai are building their LLMs on Nvidia’s chips. At the Semicon India 2025, ASML CEO, Christophe Fouquet discussed providing advanced lithography solutions to Indian fabs. ARM Holdings has doubled its workforce in India, opened a new facility in Bengaluru, where it reportedly plans to design 2-nanometer node architecture.
Tech CEOs are now seeing India as a growing market and a potential partner in semiconductor manufacturing.
Chasing value with India’s semiconductor mission
India has moved from having no significant presence in the global semiconductor space until 2021, to positioning itself as an emerging semiconductor manufacturing hub. But it can’t advance in isolation, without the major companies in the global semiconductor supply chain playing a role. Established market leaders like Nvidia, ARM, TSMC and ASML are likely to retain strong positions in capturing margins.
For investors considering India’s Semiconductor Mission, the key is to follow the data and invest where the value is realised.
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The article has been written by Subho Moulik, Founder & CEO, Appreciate
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