Beyond traditional engineering, L&T Semiconductor is betting on design, acquisitions and global partnerships; targeting massive revenue before stepping into the IPO spotlight.
L&T Semiconductor, the chip design arm of Larsen & Toubro, will only pursue a stock market listing after surpassing $500 million in annual revenue, chief executive Sandeep Kumar recently mentioned.
According to a report by Financial Express, the company, nearing two years of operations, is currently prioritising product development, acquisitions, and global partnerships over immediate listing plans.
The fabless venture has no immediate plans to set up its own fabrication or outsourced assembly plants. Instead, it is concentrating on design-led growth. Since its launch, the firm has built a core engineering team, initiated several design programmes and completed two acquisitions. About a dozen new products are scheduled for release in the next year.
L&T Semiconductor has also signed agreements with seven to eight partners worldwide. Roughly one-third are based in India, while the rest are spread across Japan, Europe and the United States.
The company stated that the strongest demand is currently seen in the industrial and automotive sectors, where development cycles run two to three years. L&T Semiconductor has also entered the energy market, exploring silicon carbide technologies. More recently, the venture has expanded into telecom solutions as well.
Acquisitions are central to its growth strategy. A notable example is the takeover of a Fujitsu unit, which added products, technology, customers and immediate revenue. The company has committed $300 million to research and development, of which $100 million has already been invested.
Kumar noted that profitability varies by segment, with margins ranging from 10% in outsourced assembly to as high as 80% in specialised plants.
