L&T enters semiconductor industry with $300 million fabless chip company
What's the story
Larsen & Toubro (L&T) is set to invest over $300 million in the establishment of a fabless chip company, as part of India's drive to develop a domestic semiconductor industry.
The tech-to-construction firm plans to design 15 products by year-end and initiate sales by 2027, according to Sandeep Kumar, head of L&T Semiconductor Technologies.
This move aligns with India's efforts to reduce costly imports and build local semiconductor capacity.
Strategic approach
L&T's focus and market strategy
L&T's investment is relatively small compared to leading fabless chipmakers like NVIDIA and Advanced Micro Devices.
The company plans to specialize in products such as power chips, radio-frequency semiconductors, and mixed-signal integrated circuits.
"Automotive, industrial, and energy — those are the sectors we've picked as they are going through very heavy transformation," Kumar said. "There is space to compete, succeed, and even capture the market."
Expansion plans
L&T Semiconductor Technologies to double workforce
L&T Semiconductor Technologies currently employs around 250 people, primarily chip designers.
The company plans to double this number by the end of 2024, as stated by Kumar.
Despite requesting government assistance with chip designing subsidies or incentives for large firms, L&T does not intend to seek funding outside of its own group.
National initiative
India's $10 billion program attracts global chipmakers
The Indian government has launched a $10 billion program to attract chipmakers and their suppliers.
This initiative has already led Tata Group to construct India's first major chip factory, and prompted US memory maker Micron Technology to establish a $2.75 billion assembly facility in Gujarat.
The Adani Group also plans to build a chip plant with an Israeli partner, further bolstering India's semiconductor industry.