Archean Chemical Soars 12% to CY25 High as Govt Approves Semiconductor Fab Project
Shares of Archean Chemical Industries hit ₹727.80 after subsidiary wins India Semiconductor Mission approval for Silicon Carbide-based semiconductor fab in Odisha.
Archean Chemical surges 12% on 13 August 2025 after its subsidiary secures government approval to set up India’s first Silicon Carbide compound semiconductor fab. Get full market analysis, outlook, and sector impact.
Archean Chemical Soars 12% to CY25 High as Govt Approves Semiconductor Fab Project
Mumbai, 13 August 2025 — Archean Chemical Industries Ltd (ACIL) shares rallied 12% intraday to touch ₹727.80 on the BSE, marking their highest level in Calendar Year 2025, after the government approved its subsidiary’s proposal to establish India’s first commercial Silicon Carbide (SiC) compound semiconductor fab.
This approval, granted under the India Semiconductor Mission (ISM), positions Archean Chemical as a key player in India’s fast-growing semiconductor manufacturing ecosystem — a sector receiving massive policy and financial support under the Production Linked Incentive (PLI) scheme.
Market Reaction – Strong Buying Interest and Record Volumes
By 10:38 AM IST, ACIL was trading at ₹713, up 9%, while the BSE Sensex gained just 0.27% to 80,453.
- Intraday High: ₹727.80
- Intraday Low: ₹667.05
- Volume Spike: 1.81 million shares traded across NSE and BSE — a multi-fold surge over the average daily volume.
Market analysts note that this spike reflects institutional accumulation on expectations of long-term earnings growth from the high-margin semiconductor vertical.
The Big Announcement – Silicon Carbide Fab in Odisha
The government’s green light covers SiCSem Private Limited, a fully-owned subsidiary of ACIL, which will partner with Clas-SiC Wafer Fab (UK) to establish the fab.
Project Highlights:
- Location: Odisha, India
- Annual Capacity: 60,000 wafers & 96 million packaged units
- Applications: Missiles, defence equipment, electric vehicles (EVs), railway systems, fast chargers, data centre racks, consumer appliances, solar inverters
- Strategic Impact: First commercial-scale SiC fab in India, reducing dependence on imports
Government Support – Part of ₹4,600 Crore Semiconductor Push
This approval is part of the Union Cabinet’s sanctioning of four new semiconductor projects worth ~₹4,600 crore under ISM.
With these, India’s total approved semiconductor projects rise to 10, involving a cumulative investment of ₹1.60 trillion across six states.
Strategic Industry Implications
The move places Archean Chemical in a strategic intersection of specialty chemicals and high-tech manufacturing, opening new revenue streams beyond its existing marine chemicals and bromine products portfolio.
Why Silicon Carbide?
- Higher efficiency in power electronics
- Better thermal conductivity — critical for EVs and defence
- Global demand surge due to electrification and renewable energy adoption
Technical Analysis – Breakout Confirmation
From a technical standpoint, ACIL has broken out of a multi-month consolidation:
- Support: ₹680
- Immediate Resistance: ₹740
- 52-Week Range: ₹408.35 – ₹832
- RSI: 69 (approaching overbought but supported by strong volumes)
If the rally sustains, analysts expect a short-term target of ₹780–₹800.
Financial Performance Snapshot
While the latest quarterly results showed stable core chemical operations, the semiconductor project is expected to materially impact revenues from FY27 onwards.
| Metric (FY25) | Value |
|---|---|
| Revenue | ₹1,870 crore |
| EBITDA Margin | 24.3% |
| Net Profit | ₹412 crore |
| ROE | 18.2% |
| Debt/Equity | 0.42x |
Peer Comparison – Unique Positioning
Unlike pure-play chemical companies like Deepak Nitrite or Tata Chemicals, ACIL will soon have dual revenue drivers:
- Marine & specialty chemicals (steady cash flows)
- High-tech semiconductor manufacturing (scalable growth potential)
Analyst Commentary
Brokerage sentiment has turned sharply bullish:
“The SiCSem fab project diversifies ACIL into a sunrise sector with strong policy backing. Execution remains key, but the stock has re-rated for the better.” — Senior Analyst, Mumbai-based brokerage
Risks to Watch
- Project execution delays
- Global semiconductor price volatility
- Technology transfer risks in collaboration with foreign partner
- Potential capex overruns impacting near-term cash flows
Outlook – Re-Rating Underway
With the semiconductor mission tailwind, ACIL could see:
- Expansion of market capitalization into midcap territory
- Higher valuation multiples due to tech exposure
- Increased institutional investor interest
