Lithography scanners, etch and deposition tools and the parts inside them - mostly made by a few US, Dutch and Japanese firms that are now building in India.
Note: Direct play on equipment-supply localisation under Semicon 2.0
Market cap, ratios, CAGR and revenue: company table snapshot as of 30 Oct 2026 (the same figures on every page). Price: snapshot as of 30 Oct 2026. Not investment advice.
Where it fits
Tools are most of a fab's cost. ASML makes lithography scanners; Applied Materials, Lam Research and Tokyo Electron make deposition, etch and cleaning tools. They buy precision parts, vacuum systems and sub-assemblies from suppliers - the part India can realistically win.
Why it matters
Semicon 2.0's 'machines & materials' pillar is new: 30% capital support for equipment and sub-assembly plants (from ₹300 Cr of investment) plus a production incentive of 10% falling to 2% of the domestic value of parts, for 5 years from FY29. At SEMICON India (Sep 2026) Applied Materials announced a US$5bn, 10-year India plan; Lam Research has committed ~₹10,000 Cr.
Where the value pool sits
Equipment makers earn 45-50%+ gross margins globally. Indian suppliers would earn precision-engineering margins on parts and sub-assemblies, a small but fast-growing pool if global toolmakers localise their supply chains.
Key drivers
Semicon 2.0 equipment incentives
Global toolmakers' supply-chain diversification
Domestic fab and OSAT tool demand
Potential bottlenecks
Tight qualification standards for parts that touch the wafer
Export controls on advanced tools
Few Indian firms with semiconductor-grade machining and cleanliness
Investor metrics to watch
Indian suppliers qualified by ASML, Applied, Lam, TEL