The localisation of backend operations is expected to reduce dependence on overseas facilities
L&T Semiconductor Technologies (LTSCT) is shifting its outsourced semiconductor assembly and testing (OSAT) operations from overseas facilities to India, marking a significant step toward localising a larger share of its semiconductor value chain. The fabless chip design company is partnering with domestic OSAT providers, including Tata Electronics, as India expands its semiconductor packaging and testing ecosystem.
The company said the move reflects increasing confidence in India’s ability to support advanced backend semiconductor manufacturing at globally competitive costs. While LTSCT will continue to fabricate its chips at foundries in the United States, Taiwan and Japan, it now considers India a viable destination for assembly and testing operations.
As a fabless semiconductor company, LTSCT designs chips while outsourcing wafer fabrication, assembly and testing to specialist partners. According to the company, India’s emerging OSAT ecosystem has matured to a stage where it can compete with established international facilities on both capability and cost. LTSCT has already started engaging with Tata Electronics, which is preparing to begin commercial semiconductor assembly and testing operations.
The localisation of backend operations is expected to reduce dependence on overseas facilities, improve supply chain resilience and contribute to the development of India’s semiconductor manufacturing ecosystem.
Despite the shift in assembly and testing, LTSCT said it will continue manufacturing its chips at fabrication plants in the US, Taiwan and Japan for the foreseeable future. The company added that India’s upcoming semiconductor fabrication facilities could become an option once they are operational, provided they meet commercial and pricing requirements.
LTSCT emphasised that fabrication decisions will continue to be driven by technology, quality and cost considerations rather than geography. As a fabless company, it retains the flexibility to choose any foundry that offers the required process technology and competitive economics.
The development comes as India accelerates investments across the semiconductor value chain, including chip design, fabrication, assembly and testing, supported by government incentives and new manufacturing projects aimed at reducing reliance on imported semiconductor components.
