Davos 2025: Bharat Forge to enter 'niche' semiconductor component business

Amit Kalayani Joint MD Bharat Forge and Moneycontrol's Chandra R Srikanth in Davos.

Bharat Forge is gearing up to enter the semiconductor industry, with focus on niche markets spanning sectors from consumer and automotive to industrial and high-end defence, joint managing director and vice chairman Amit Kalyani said on January 21.

Speaking to Moneycontrol at the World Economic Forum in Davos, Kalyani said Bharat Forge has been working on a strategy for the past year to enter the specialised business, a move that will benefit the company as well as India.

"We see a huge opportunity in the semiconductor space, and it’s something that India needs to develop domestically," Kalyani said, adding the new initiative will likely be announced in two months.

The company is aligning the expansion with the government’s production linked incentive (PLI) scheme, which aims to boost local manufacturing across several sectors, including semiconductors. "It will be through the PLI...We are talking to the government for this," he said.

Bharat Forge is not looking to join the already saturated large semiconductor market, Kalyani said, adding the company will focus on a niche segment that could have global application, positioning India as a key player in the space.

“We don’t want to pursue the large semiconductor play, which many players are already in. Instead, we’re focused on something that’s unique but has global potential,” Kalyani said.

Bharat Forge’s push into the semiconductor sector aligns with the company’s philosophy of backward integration, a strategy it has successfully implemented across its defence and automotive businesses.

There is a significant intersection between Bharat Forge’s defence and automotive divisions, particularly in the area of embedded systems, a crucial component for the growing semiconductor demand.

India is looking to establish itself as a global hub for semiconductor manufacturing, recognising the strategic importance of this sector in powering everything from consumer electronics to advanced technologies such as artificial intelligence and electric vehicles.

The PLI scheme aims to attract investment and foster innovation in semiconductor manufacturing, with a focus on reducing the country’s dependence on imports. Several major players, domestic as well as international, are already exploring opportunities in the sector, signalling India's emergence as a key player in the global semiconductor supply chain.

This move also compliments Bharat Forge’s broader expansion plans.

The company is in the process of setting up two large plants in India, with one already announced and the second pending discussions with the Maharashtra chief minister, Kalyani said.

"The company is looking at an investment of around 4-5 thousand crores over the next two to three years, with the potential for even greater investment," Kalyani said.

In December, Bharat Forge launched a qualified institutions placement (QIP) of equity shares, raising up to Rs 1,650 crore.

In the September quarter, the company’s revenue was largely flat at Rs 2,246 crore, while net profit rose 4.4 percent year-on-year to Rs 361.1 crore.