Focusing on the automotive and industrial sector, Larsen & Toubro is on the way of establishing a $300 million fabless semiconductor firm in India, which may begin sales with 15 products in 2027.
Larsen & Toubro Ltd (L&T) is planning to invest over $300 million to establish a fabless semiconductor company in India. The technology and construction firm aims to boost India’s competitiveness in the global semiconductor ecosystem by aligning with other major Indian corporations.
Over the next three years, L&T will allocate funds to create a chip firm that focuses on designing and marketing chips while outsourcing its fabrication. According to Sandeep Kumar, the head of L&T Semiconductor Technologies, the company aims to develop 15 products by the end of this year and commence sales in 2027.
Kumar further mentioned that L&T has chosen to focus on the automotive, industrial, and energy sectors due to their significant transformation. He indicated that these sectors offer opportunities for competition, success, and market capture.
However, L&T’s investment is small compared to the expenditures of other fabless chipmakers like Nvidia and Advanced Micro Devices (AMD). While these international players focus on areas such as AI-supporting graphics processing units (GPUs), the Indian company aims to develop products like power chips, radio-frequency semiconductors, and mixed-signal integrated circuits.
Semiconductors are becoming increasingly vital globally, with countries like the US, Germany, Japan, and Singapore ramping up domestic production to secure supplies amid rising import costs due to the US-China trade war. India might emerge as a key beneficiary of this shift.
Both international and domestic companies are seeking government subsidies to benefit from India’s push to develop its own semiconductor industry and reduce costly imports.
L&T Semiconductor Technologies currently has around 250 employees, mostly chip designers, and plans to double this by the end of 2024. While the company has requested government subsidies for chip design, it has no plans to seek external funding beyond the L&T group.
The central government has launched a $10 billion program to attract chipmakers and suppliers, resulting in Tata Group building India’s first chip fab, Micron Technology establishing a $2.75 billion assembly plant in Gujarat, and the Adani Group planning another fabrication unit in Maharashtra with Tower Semiconductor from Israel.
