Dalal Street's New Chemistry: How India's Chip Push Is Fueling A Specialty Chemical Rally

India's semiconductor ambitions are creating an unexpected opportunity for the country's specialty chemical industry. As India builds fabs, assembly and packaging facilities, demand is emerging for highly specialised chemicals that are critical to semiconductor manufacturing.

With 12 semiconductor projects approved, India is gradually building a domestic chip ecosystem. But the opportunity extends beyond chip manufacturing itself. Semiconductor production requires photoresists, ultra-pure cleaning agents, etchants and other electronic-grade chemicals, creating a potential new market for Indian specialty chemical companies.

No Chips Without Chemicals

Semiconductor manufacturing requires chemicals with extremely high levels of purity, as even tiny amounts of contamination can affect chip yields.

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Photoresists are used to create intricate circuit patterns on semiconductor wafers, while ultra-pure chemicals are required across several stages of manufacturing. However, India remains heavily dependent on imports for these products.

More than 70% of electronic-grade chemicals are currently imported, with Taiwan, South Korea and China among the dominant suppliers. This import dependence is now creating an opportunity for domestic chemical manufacturers to develop and qualify products for the semiconductor industry.

Chemical Companies Chase The Chip Opportunity

Several Indian specialty chemical companies have already started positioning themselves for this emerging market. Archean Chemical Industries announced plans for a semiconductor fab in Odisha in October 2024, with capex of around Rs 2,067 crore. Its silicon carbide, or SiC, fab is currently under development.

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Acutaas Chemicals entered the segment through a joint venture with a Korean company in June 2025, involving around Rs 200 crore of investment. The Korean plant was inaugurated in August 2026. Tatva Chintan Pharma Chem announced its semiconductor chemical development plans in June 2023 and has invested around Rs 200 crore. Its first product has now been qualified.

Aether Industries announced plans in August 2026 to develop advanced semiconductor materials for niche applications, including AI and 5G. The company plans to expand capacity threefold by 2030, with Rs 2,200-2,300 crore earmarked for Site 5 development through fiscal 2030. Anupam Rasayan India acquired Jayhawk Fine Chemical Corp for $150 million to strengthen its semiconductor chemicals business. Fiscal 2027 is expected to be the first year of integration.

Chip Chemistry Reflects On Dalal Street

The semiconductor theme has already been reflected in the performance of several chemical stocks. Aether Industries has gained 136%, while Acutaas Chemicals has risen 143%. Tatva Chintan Pharma Chem is up 81%, Anupam Rasayan India has gained 12%, while Archean Chemical Industries has declined 29%.

Valuations remain elevated for several companies. Aether trades at around 97 times earnings, Acutaas at 70 times, Tatva Chintan at 80 times and Anupam Rasayan at 78 times. Archean trades at around 62 times earnings.

However, forward valuations are lower for all five companies, indicating the earnings growth expected by the market.

Analyst coverage also remains broadly positive, although views vary. Aether has seven Buy, two Hold and two Sell recommendations, while Acutaas has 10 Buy recommendations. Tatva Chintan has three Buy calls, Anupam Rasayan four Buy and one Sell, and Archean four Buy, two Hold and one Sell.

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