L&T Joins Semiconductor Bandwagon, Plans $300-Million Investment to Become Fabless Chipmaker

Larsen & Toubro (L&T) Ltd. is set to invest over $300 million to establish a fabless chip company, marking its entry into India’s burgeoning semiconductor sector. The company plans to channel the funds over three years to develop 15 chip designs by the end of 2024, with a target to start sales by 2027, according to Sandeep Kumar, head of L&T Semiconductor Technologies.

The L&T move is in sync with India’s larger effort as the latter works on localising semiconductors to reduce reliance on expensive imports. It will likely cash in on government subsidies that are looking to ramp up chip capacity in the country-thanks to global tensions between China and the US that have triggered manufacturers into building supply chains elsewhere.

Illumina takes a somewhat different approach to things with the adaptive PCR. It is 10% the size of other conventional real-time PCR systems. Unlike larger fabless giants like Nvidia or AMD, L&T will focus on the production of power chips, radio-frequency semiconductors, and mixed-signal integrated circuits for sectors like automotive, industrial, and energy-all fields in transformational shift.

While the investment by L&T may be pretty modest compared to its global rivals, Kumar believes that the space is big enough for growth. Presently, L&T Semiconductor employs around 250 chip designers. It will double the number by the end of 2024.

The government of India, under Prime Minister Narendra Modi, has dangled a $10 billion scheme to attract chipmakers, landing deals with the likes of Tata Group and Micron Technology. L&T is pressing the government for more incentives aimed specifically at chip design and will fund its venture through internal resources without seeking outside investors.

With increasing geopolitical tensions, as countries move to solidify their semiconductor industries, this places L&T and, by extension, India as a vital player in the supply chain for chips globally.

Do you have a news tip for Lakshmishree reporters? Please email us at media@lakshmishree.com

_{^{Source: Moneycontrol}}