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L
arsen & Toubro Ltd. (L&T) plans to invest over $300 million to establish a semiconductor company, marking the conglomerate's entry into India's emerging chip industry. Over the next three years, L&T will create a fabless chipmaker, which focuses on designing and selling semiconductors while outsourcing production. The company aims to develop 15 chip products by the end of 2024, with sales expected to begin in 2027, according to Sandeep Kumar, head of L&T Semiconductor Technologies.
The move aligns with the efforts of both global and domestic companies looking to benefit from India’s push to build local semiconductor capabilities and reduce dependency on costly imports. As geopolitical tensions between the US and China rise, electronics manufacturers are seeking alternatives to China and Taiwan, positioning India as an attractive hub for chip production.
While L&T’s investment is modest compared to industry giants like Nvidia and Advanced Micro Devices, the Indian company is focusing on sectors such as automotive, industrial, and energy, areas that are experiencing significant transformation. Products in the pipeline include power chips, radio-frequency semiconductors, and mixed-signal integrated circuits.
"These sectors offer room to compete, succeed, and potentially capture market share," said Kumar. Semiconductors have become critical components in global industries, with countries such as the US, Germany, Japan, and Singapore enhancing domestic chipmaking to secure supplies for technologies ranging from artificial intelligence to electric vehicles.
L&T Semiconductor Technologies currently employs around 250 people, mostly chip designers, and plans to double that workforce by the end of 2024. While the company is seeking government support for chip design subsidies and incentives for large firms, it will not seek external funding, relying solely on L&T's resources.
India's semiconductor ambitions are backed by Prime Minister Narendra Modi ’s administration, which has launched a $10 billion programme to attract chipmakers and their suppliers. This initiative has already encouraged Tata Group to establish India’s first major chip factory, and led US-based Micron Technology to invest in a $2.75 billion assembly facility in Gujarat. Additionally, the Adani Group has partnered with an Israeli company to set up a chip plant. Government officials have indicated a willingness to expand the semiconductor fund to further support the country’s growing chip industry.
