Bharat Forge enters semiconductors with 3 top chipmakers

What Bharat Forge said, and why markets noticed

Bharat Forge has said it has entered the “billion-dollar” semiconductor industry and is already working with three of the world’s five largest semiconductor companies, according to chairman Baba Kalyani in an interaction with CNBC-TV18. The company also said it is securing “major orders”, though it did not disclose customer names, order values, or deal timelines.

The development drew immediate attention because it signals a push beyond Bharat Forge’s core engineering and auto component businesses into semiconductor supply chain opportunities. The company is positioning this as part of a broader strategy that also targets data centre-linked demand and other new-age industrial markets.

On the market, Bharat Forge shares rose as much as 2.4% on Wednesday. At one point, the stock was trading around ₹1,954 on the NSE, up 1.49% from the previous close, while another update cited it up about 1.4% near ₹1,952.

Focus is on lithography machine components, not a fab buildout

Kalyani said Bharat Forge is working on a new semiconductor project and collaborating with several companies to manufacture parts for lithography machines. Lithography tools are a critical link in the chipmaking equipment chain, and component manufacturing typically requires high precision engineering and strict quality controls.

Importantly, the company’s stated emphasis is on supplying parts rather than building a large semiconductor fabrication facility. Management commentary, as reported, suggests Bharat Forge is seeking a specialised position with global customers, instead of pursuing a broad “large semiconductor play.”

The company has not shared a timeline for commercial production, nor has it provided capacity details for this semiconductor component initiative. It also did not disclose how much of the current order pipeline is tied to semiconductors.

How the semiconductor effort fits into a wider industrial strategy

Alongside the semiconductor component initiative, Kalyani flagged a wider push into data centre-linked demand and other new-age industrial markets. He said investments over the past two years, continuing into the current year, are adding capacity for products aligned to these themes.

That framing matters because it positions semiconductors as part of a larger industrial strategy rather than a standalone bet. For investors, this reduces reliance on a single new vertical and links the opportunity to Bharat Forge’s existing strengths in engineering-led manufacturing.

The messaging also indicates the company is trying to win business where its capabilities translate into global supply chain relevance, particularly in precision parts that are required by original equipment manufacturers and their ecosystems.

Policy backdrop: India Semiconductor Mission and ISM 2.0 expansion

Bharat Forge’s announcement comes as India intensifies efforts to build a domestic semiconductor ecosystem under the India Semiconductor Mission (ISM). The government has attracted investment commitments of more than ₹165,000 crore across 12 approved semiconductor fabrication, assembly, testing and packaging (ATMP) projects.

The programme was launched with an outlay of ₹76,000 crore. It is being expanded under ISM 2.0 to include semiconductor equipment, materials, and indigenous intellectual property, widening the scope from fabrication and packaging into upstream and enabling segments.

For component makers, this policy expansion is relevant because it can support local supplier development and create demand linked to semiconductor equipment and materials, not only chip fabs and packaging units.

Defence remains a large anchor for near-term visibility

Separately, Bharat Forge told CNBC-TV18 that it has secured its largest-ever army carbine order. While the company did not provide the order value in the provided information, the statement adds to a defence narrative that already includes multi-year visibility.

In FY26, Bharat Forge secured new orders worth ₹4,814 crore. Of this, defence contracts accounted for ₹2,816 crore. The company’s total defence order book stood at ₹10,961 crore at the end of FY26, and it was also referenced at around ₹11,000 crore at FY26-end, broadly consistent with the ₹10,961 crore figure.

The defence pipeline provides a measurable base while the semiconductor component initiative develops, especially since management has not shared commercial timelines for the semiconductor work.

Investment plans: ₹4,000 to ₹5,000 crore over 2 to 3 years

In a separate discussion on investment plans, management indicated investments of at least ₹4,000 to ₹5,000 crore over the next 2 to 3 years across a few focus areas. This included setting up two large plants, with one already announced and another expected to be discussed with the chief minister before an announcement.

Maharashtra was mentioned as a likely location for the second plant. The company linked these investments to building capacity for products that go into data centre markets and the semiconductor market.

This guidance is notable because it ties capex intent to both the emerging semiconductor opportunity and demand themes related to digital infrastructure.

What is known about growth expectations and valuations

Bharat Forge has been described as projecting a 25% revenue increase in Indian manufacturing for FY27, despite currently high valuations. The same set of commentary also referenced upcoming ramps from H2FY27, implying that part of the growth thesis is tied to later-period execution rather than immediate delivery.

From the information available, the semiconductor project is framed as a precision component play with global customers, but without disclosed order values or ramp schedules. As a result, investors are likely to rely on disclosed order books and ongoing capacity additions to track progress.

Key figures mentioned so far

Market impact: what changed immediately, and what did not

The immediate market impact was visible in the stock’s intraday move of up to 2.4%, with the price quoted around ₹1,952 to ₹1,954 in different updates. The buying interest appeared linked to the message that Bharat Forge is diversifying into the semiconductor ecosystem and is already engaged with leading global players.

However, the information provided does not include commercial timelines for semiconductor component production, capacity numbers, or order sizes. In that context, near-term fundamentals referenced in the same set of updates remain anchored by defence order visibility, including the FY26-end order book of ₹10,961 crore and FY26 new order inflows of ₹4,814 crore.

The policy environment under ISM and the expansion to ISM 2.0 provides supportive context for equipment and material segments. But the company has not tied its own semiconductor component initiative to any specific ISM-approved project or incentive in the details provided.

Analysis: why a lithography-component entry is strategically important

Bharat Forge’s stated approach points to an attempt to insert itself into the semiconductor equipment supply chain, where qualification standards can be stringent and relationships with global customers can be sticky once established. A focus on parts for lithography machines suggests the company is aiming for precision manufacturing niches rather than competing directly in semiconductor fabrication.

At the same time, the absence of disclosed order values, customer names, and production timelines makes it difficult to quantify how quickly semiconductors could become material to revenue. That places more weight on execution signals investors can track, such as capex deployment (₹4,000 to ₹5,000 crore over 2 to 3 years), plant announcements, and confirmed customer programmes.

The broader context of India’s semiconductor policy push, with ₹165,000+ crore of commitments across 12 approved projects and an expanded ISM 2.0 scope, reinforces why companies are exploring adjacent opportunities in equipment components and enabling manufacturing.

Conclusion

Bharat Forge says it has entered the semiconductor industry through a component-led strategy and is working with three of the world’s five largest semiconductor companies, including on parts for lithography machines. The stock rose as the market reacted to the diversification narrative, while the company’s disclosed financial visibility continues to be supported by a sizeable defence order book of ₹10,961 crore at FY26-end.

Next milestones to watch, based on what the company has and has not disclosed, include any formal announcement of the second large plant (with Maharashtra mentioned as a likely location), and more detail on semiconductor project timelines, qualification stages, and commercial rollouts when management chooses to provide them.