Why Moschip Technologies Share Price is Rising

Have you ever noticed how some technologies seem to catch fire, sparking a frenzy of excitement?

That's exactly what's happening with artificial intelligence (AI) right now. The demand for the chips that power AI is soaring, and investors are taking notice.

In fact, the semiconductor sector has become a hotbed of activity, with companies like MosChip Technologies experiencing phenomenal growth.

Over the past year, MosChip's share price has skyrocketed 241.9%, and the upward trend shows no signs of slowing down. In the past five days it is up 37.2%.

It also hit its 52-week high mark multiple times in the past week. Yesterday it touched a new 52-week high of Rs 320.8.

So, what's driving this surge?

Let's investigate the factors propelling MosChip Technologies to new heights.

#1 MeitY Approval

The Indian government's Ministry of Electronics and Information Technology (MeitY) approved the company's application for a subsidy under the semiconductor design linked incentive (DLI) scheme.

This scheme offers financial incentives to domestic companies like MosChip Technologies, helping them compete in the global semiconductor market by supporting the design and development of chips.

The company plans to leverage the DLI support to develop a smart energy meter IC, a specialised chip designed for these meters. This aligns perfectly with the government's vision of a Aatmanirbhar Bharat in the semiconductor industry.

The smart energy meter IC market itself is projected for significant growth, making this project even more promising for the company.

The DLI approval signifies a major validation of MosChip's technology and its potential to contribute to India's chip design ecosystem. This positive development is likely a key factor behind the recent rise in Moschip's share price.

#2 Big Order Win

MosChip secured a significant contract earlier this month. The Centre for Development of Advanced Computing (CDAC) awarded the company a Rs 5.1 billion (bn) contract to develop a high-performance computing (HPC) system on a chip (SoC) using cutting-edge 5 nm technology.

This project represents a major leap forward for the company. The 5 nm technology promises significant advancements in performance, energy efficiency, and chip size.

Successfully developing this chip will not only solidify its position in the global market but also open doors to new opportunities domestically and internationally. The potential applications of this technology extend beyond just HPC.

The company anticipates variants of the chip being used in the artificial intelligence (AI) and general cloud computing sectors as well.

This versatility, coupled with the efficiency of the 5 nm technology, is expected to attract significant interest from major industries worldwide seeking high-performance turnkey ASIC solutions.

#3 Good Financial Performance

The semiconductor company posted a net profit of Rs 98.8 million (m) in FY24, an increase of 60% from Rs 61.8 m in FY23. The company achieved growth in profit due to growth in total income and a reduction in finance expenses.

The company's total income in FY24 rose 46% YoY to Rs 2,971.5 bn from Rs 2,033.2 bn.

It has been on a deleveraging drive. Its total borrowing reduced to Rs 75.4 m compared to Rs 140 m reported in FY23.

#4 New Partnership

In March 2024 the company announced a partnership with Tenstorrent to work on cutting-edge RISC-V solutions. This partnership leverages MosChip's expertise in design services, particularly its experience with physical design and verification.

This collaboration allows MosChip to contribute to the development of innovative AI hardware and solutions.

What Next?

The Indian semiconductor industry is poised for a significant upswing, and MosChip Technologies is in a prime position to benefit.

Government initiatives like Make in India and the Semiconductor Mission are actively promoting domestic chip production. These efforts translate to financial aid and infrastructure development, creating a fertile ground for the company's growth.

Furthermore, the global chip shortage fuelled by surging demand across sectors like AI, electric vehicles, and smartphones presents a golden opportunity. It can potentially fill this demand gap by catering to the domestic market.

It has a strong track record in design services, particularly with complex chips like ASICs. This expertise makes it a valuable partner for companies seeking to design and manufacture their own chips.

However, navigating this exciting opportunity won't be without challenges. The global semiconductor market is fiercely competitive, with established giants like TSMC dominating the scene.

It will need to continuously innovate and develop cost-effective solutions to differentiate itself. Additionally, successfully ramping up domestic chip production requires overcoming technical hurdles and building a robust supply chain.

Delays or unforeseen challenges in these areas could impact its growth trajectory.

In conclusion, the Indian semiconductor industry presents a promising future for Moschip Technologies.

However, the company's long-term success will hinge on its ability to navigate the competitive landscape and execute on its ambitious plans.

How Moschip Technologies Share Price has Performed Recently

In the past five days, MosChip Technologies share price has rallied 38.1%. In the last month, it is up 103.9%.

In 2024, so far its share price has surged 180.5% and its up 242.4% in the last year.

The stock touched its 52-week high of Rs 320.8 on 21 June 2024 and a 52-week low of Rs 74.5 on 5 July 2023.

About MosChip Technologies

MosChip Technologies is headquartered in Hyderabad, India. It is a leading publicly traded company specialising in semiconductor, software and system design solutions.

With over 1,300 engineers spread across Silicon Valley, Hyderabad, Bengaluru, Ahmedabad, and Pune. It offers a comprehensive range of solutions including turn-key digital and mixed-signal ASICs, design services, SerDes IP, software and system design.

With a rich legacy spanning more than two decades, MosChip has successfully developed and delivered millions of connectivity ICs worldwide.

To know more, check out Moschip Tecnhnologies financial factsheet and its latest quarterly results.

For a sector overview, read our software sector report.

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To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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