Archean Chemical shares rise 12% in early deals, here's why

Archean Chemical shares rose 12% in early deals following the approval of a new project under the India Semiconductor Mission (ISM). The development led to the stock turning positive on a year-to-date basis.

The stock rose 11.63% to Rs 727.90 against the previous close of Rs 651.95 on BSE. Market cap of the firm rose to Rs 8641 crore. The Union Cabinet's approval concerns SiCSem Pvt. Ltd., a subsidiary of Archean Chemicals, which will establish a Silicon Carbide-based compound semiconductor fab in Info Valley, Bhubaneshwar, Odisha. This will be the first commercial compound fab in India, boasting an annual capacity of 60,000 wafers and a packaging capability of 96 million units.

The ambitious project will be realised with an estimated capital expenditure of ₹2,067 crore. SiCSem Pvt. Ltd. is set to collaborate with Clas-SiC Wafer Fab Ltd., a UK-based company, to establish this integrated facility. The products manufactured in this unit will serve various applications including missiles, defence equipment, electric vehicles, railways, fast chargers, data centre racks, consumer appliances, and solar power inverters. These diversified applications highlight the strategic significance of this facility for both the company and the broader market.

This initiative aligns with Archean Chemicals' growth strategy and underscores its commitment to advancing technological capabilities within India. The move is expected to enhance the company's market position and contribute to the nation's semiconductor infrastructure.

Industry experts anticipate that the establishment of this fab could stimulate further investments in the semiconductor sector, potentially attracting more collaborations and innovations. The market response reflects optimism about Archean Chemical's expansion efforts, as evidenced by the recent stock performance.