Expanding India’s Semiconductor Horizons
In a major stride towards enhancing its technological footprint, Larsen & Toubro Ltd (L&T) has announced a $300 million investment to establish a new fabless semiconductor company. This investment, which will be distributed over the next three years, signifies a key move in advancing India’s position in the global semiconductor market and reducing dependence on expensive imports.
Fabless companies, unlike traditional semiconductor enterprises with their own manufacturing facilities, specialize in designing and selling chips but outsource the production to specialized plants. L&T’s venture is set to focus on designing a variety of semiconductor products while leveraging manufacturing partnerships.
Diverse Product Development and Strategic Workforce Expansion
By the end of the current year, L&T Semiconductor Technologies aims to develop 15 distinct semiconductor products, with plans to begin sales by 2027. Targeting transformative sectors such as automotive, industrial, and energy, the company is positioning itself in key growth areas including power chips, radio-frequency semiconductors, and mixed-signal integrated circuits. This approach sets L&T apart from other major fabless chipmakers who typically focus on high-performance products like AI-driven graphics processors.
The company, which currently employs 250 individuals predominantly in chip design, plans to double its workforce by the end of 2024. While seeking governmental support through subsidies for chip design, L&T has indicated self-reliance in funding, not seeking external financial support beyond its group.
L&T and IBM Forge Ahead with Strategic Semiconductor Innovations
In a parallel development, L&T has forged a significant partnership with IBM to enhance processor technologies, aiming at developing secure, high-performance processors suitable for edge devices and hybrid cloud environments. This collaboration is poised to support India’s ambition of becoming a pivotal player in the semiconductor arena by fostering innovative solutions across automotive, energy, and industrial sectors.
The partnership will combine L&T’s semiconductor design expertise with IBM’s cutting-edge processor technologies, enhancing the competitive edge of India’s tech offerings globally.
India’s Global Semiconductor Strategy Amidst Geopolitical Shifts
The global semiconductor industry is crucial, especially as geopolitical tensions, like the US-China trade disputes, amplify the costs of chip imports. In response, nations such as the US, Germany, Japan, and Singapore are intensifying efforts to ramp up domestic production to secure their tech supply chains.
Aligned with these global shifts, India, under Prime Minister Narendra Modi’s administration, has initiated a $10 billion campaign to attract semiconductor firms and their suppliers. This has already encouraged significant commitments, including Tata Group’s upcoming major chip factory and Micron Technology Inc.’s $2.75 billion assembly facility in Gujarat. Moreover, the Adani Group plans to launch a chip plant in collaboration with an Israeli firm, marking a significant milestone in India’s semiconductor development.
