Paras Defence to Invest ₹62 Billion in Madhya Pradesh OSAT Facility

MUMBAI, India — Defense and space engineering firm Paras Defence and Space Technologies Limited (NSE: PARAS, BSE: 543367) announced on Wednesday, July 22, 2026, that its subsidiary, Paras Semiconductors Private Limited, has signed a Memorandum of Understanding (MoU) with the MP State Electronics Development Corporation (MPSeDC).

Under the agreement, Paras Semiconductors will invest approximately ₹6,200 crore (₹62 billion) to set up a greenfield Outsourced Semiconductor Assembly and Test (OSAT) facility in the Indore-Ujjain industrial corridor in Madhya Pradesh. The development marks a major step in expanding domestic semiconductor packaging infrastructure to support defense electronics, high-performance computing (HPC), artificial intelligence (AI), and data center applications.

Technical Capabilities and Facility Scope

The proposed OSAT plant will focus on advanced Integrated Circuit (IC) packaging technologies, an area traditionally dominated by East Asian manufacturing hubs.

The facility will undertake high-density packaging techniques, including 2.5D and 3D heterogeneous integration, hybrid bonding, ultra-high-density fan-out packaging, wafer bumping, flip-chip assembly, and reliability testing. These techniques enable multiple specialized silicon dies (chiplets) to be integrated into a single compact package, boosting performance while reducing power consumption.

Strategic Significance for India's Semiconductor Ecosystem

The initiative aligns with the government's India Semiconductor Mission (ISM), which offers capital subsidies to establish domestic assembly, testing, and packaging units.

By developing local OSAT capacity, Paras Defence aims to secure its supply chain for defense-grade electronic components such as optical sensors, hyperspectral imaging systems, and avionics suites while serving commercial demand across data centers and telecom infrastructure.

Official Sources Section

Regulatory filings regarding the MoU signed with the Department of Science and Technology through MPSeDC were submitted pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015. Official disclosures are available on the National Stock Exchange of India (NSE) and BSE Limited portals, with company background details on the Paras Defence Investor Relations Portal.

Quote Section

"According to corporate disclosures filed with domestic stock exchanges, Paras Semiconductors Private Limited has executed a Memorandum of Understanding with MPSeDC to collaboratively facilitate the establishment of a greenfield advanced IC packaging OSAT facility in Madhya Pradesh with a proposed investment of approximately ₹6,200 crore."

Why It Matters

• For Domestic Electronics Manufacturing: Adds high-density OSAT capabilities to India's growing semiconductor supply chain.

• For Defense Infrastructure: Reduces reliance on imported semiconductor packaging for strategic defense and space electronics.

• For Regional Industrial Growth: Brings capital investment and high-tech engineering jobs to the Indore-Ujjain industrial region in Madhya Pradesh.

Key Facts at a Glance

• Investment Scale: ₹6,200 crore (₹62 billion) proposed greenfield investment.

• Location: Indore-Ujjain belt, Madhya Pradesh.

• Key Partner: MP State Electronics Development Corporation (MPSeDC).

• Core Technology: Advanced 2.5D/3D IC packaging, hybrid bonding, and chiplet assembly.

Frequently Asked Questions (FAQ)

What is an OSAT facility in the semiconductor industry?

OSAT stands for Outsourced Semiconductor Assembly and Test. OSAT facilities take fabricated silicon wafers, cut them into individual dies, package them into protective housings, and conduct quality testing before the chips are integrated into electronic devices.

Where will Paras Defence build the new OSAT plant?

The greenfield OSAT facility is planned for the Indore-Ujjain industrial region in Madhya Pradesh, under an agreement with the MP State Electronics Development Corporation.

What industries will the new facility serve?

The facility will supply advanced semiconductor packages for defense electronics, artificial intelligence, high-performance computing, data centers, and telecom infrastructure.

Source: Official regulatory disclosures filed by Paras Defence and Space Technologies Limited with the National Stock Exchange of India (NSE) and BSE Limited.