Larsen & Toubro, the technology-to-construction conglomerate, was making an entry into the semiconductor sector. Larsen & Toubro would aim to design and sell semiconductors by outsourcing their fabrication. Larsen & Toubro Ltd. plans to invest more than $300 million to create a chip company, following other Indian conglomerates as part of an effort to build out a semiconductor industry in India. It has been planned to invest aggressively for three years to undertake designing and selling semiconductors without their fabrication. It would work on the designing of 15 semiconductor products by this year-end, while sales start from next year, said Sandeep Kumar, head of L&T Semiconductor Technologies.
Emerging Wave of Semiconductors in India
Competition is heating up in India's semiconductor market, with global and local players jostling for position on how best to exploit government incentives aimed at developing domestic chip-making capacity. The Narendra Modi-led administration has been aggressively courting the creation of a strong semiconductor ecosystem to reduce dependence on costly imports. It comes against the backdrop of increasing geopolitical tensions between the U.S. and China, which have prompted many electronics manufacturers to reduce their reliance on supply chains involving China and Taiwan.
The foray of L&T into the semiconductor space seems rather modest against global giants like Nvidia and AMD, but the company is creating its own niche, with attention to sectors which would see fast transformation: automotive, industrial, and energy. Thus, L&T does not compete in AI-heavy segments, nor does it focus on such products. It targets a product involving power chips, radio-frequency semiconductors, and mixed-signal integrated circuits.
Government Support and Industry Growth
The government had announced a fund of US$10 billion to encourage chipmakers and their suppliers to set up units in the country. It has so far attracted companies like Tata Group, which is building the country's first major chip factory, and US-based Micron Technology that is building a $2.75-billion assembly plant in Gujarat.
According to Sandeep Kumar, L&T Semiconductor Technologies now employs close to 250 people and will keep looking at headcount doubling by the end of 2024. The company is also batting for greater government support on the lines of chip design subsidy, but its top officials have made it clear that they will not look at external funding beyond the L&T group.
While India is marching ahead in the 'Make in India' stride toward self-reliance in semiconductor manufacturing, companies like L&T stand at a very important juncture to shape the future of the country in technology.
Inputs by Agencies
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