Introduction
L&T Semiconductor Technologies, a rising fabless chip design company in India, has set its sights on launching semiconductor chip production within the next two years. The company also aims to achieve significant revenue milestones, targeting between USD 50 million and USD 1 billion across various semiconductor technologies before establishing a manufacturing unit.
In an interview with the Press Trust of India (PTI), Sandeep Kumar, CEO of L&T Semiconductor Technologies, shared the company’s vision for the future, underscoring the importance of strategic product development to establish India’s position in the global semiconductor ecosystem. L&T is also expanding its teams to handle multiple semiconductor product designs, marking a critical step in the company’s growth.
Key Highlights:
- Chip Production Timeline: L&T Semiconductor aims to begin production of its designed chips within two years.
- Revenue Target: The company plans to build a semiconductor manufacturing unit after reaching a revenue range of USD 50 million to USD 1 billion for different chip technologies.
- Team Development: L&T is halfway through building teams to manage 15 parallel semiconductor product designs.
- Fabless Strategy: The company decided to remain fabless initially to strengthen India’s strategic position in the global chip market.
- Growing Semiconductor Ecosystem in India: Alongside L&T, companies such as Tata Electronics, Micron, and CG Power are investing heavily in India’s semiconductor manufacturing sector.
L&T’s Two-Year Timeline for Chip Production
L&T Semiconductor Technologies is charting a clear course for chip production, with plans to commence manufacturing its semiconductor designs by 2026.
Kumar revealed that the company has been working tirelessly to develop a portfolio of products that will fuel India’s ambition to become a semiconductor powerhouse.
As part of this goal, L&T is focused on building and launching multiple chip designs, with six already under development.
“We are on track to have the full design team ready within the next six months. By the end of this year, we will be managing 15 parallel product designs.
Six of those designs are already underway and are set to be launched by the end of next year. We expect production to begin two years from today,” said Kumar.
Revenue Milestones Before Manufacturing Plant Setup
L&T’s strategy is to establish its manufacturing unit only after achieving a significant revenue milestone.
The company is aiming for revenue in the range of USD 50 million to USD 1 billion across its semiconductor technologies.
By hitting these financial targets, L&T will have the resources and foundation necessary to confidently invest in its own fabrication facility.
“Building a fab before securing a solid revenue stream is risky. Our focus is on developing high-value products first, ensuring we can generate the revenue needed before diving into full-scale production. Once we reach this threshold, we will establish a fab unit to produce chips in-house,” Kumar explained.
This approach helps L&T minimize risks and ensures that its manufacturing plant will be sustainable, well-funded, and aligned with the company’s long-term vision.
Expanding Team for Product Development
To support its ambitious plans, L&T Semiconductor is actively expanding its design and development teams. Kumar mentioned that the company is halfway through assembling a skilled workforce capable of managing 15 different product designs simultaneously.
By the end of the year, L&T expects to have completed its team, and consequently, will be ready to manage the entire pipeline of semiconductor projects.
“Our teams are crucial to our success. We are building a robust talent pool that will allow us to work on multiple designs at the same time. Currently, six designs are already in progress, and by the end of this year, we’ll be ready to take on the rest,” Kumar said.
Fabless Strategy to Reduce Dependence on Foreign Companies
L&T’s decision to remain a fabless company initially plays a critical role in its long-term strategy. By focusing on designing semiconductors rather than manufacturing them immediately, L&T can control its intellectual property and reduce India’s dependency on foreign chip manufacturers.
This approach is especially important given global semiconductor supply chain disruptions and the push for countries to localize chip production.
“Our goal is to develop semiconductor products that are of true strategic value to India. Being a fabless company gives us the flexibility to focus on innovation and product development. Once we have established ourselves in the market and have a solid product portfolio, we will invest in a manufacturing facility.”
Kumar
This strategy aligns with India’s broader vision of becoming a global semiconductor hub, reducing reliance on international chipmakers, and building a strong domestic semiconductor ecosystem.
India’s Growing Semiconductor Industry
L&T Semiconductor is part of a larger movement within India to establish a thriving semiconductor industry. Moreover,Companies like Tata Electronics, Micron, CG Power, and Kaynes Technologies are investing a total of Rs 1.52 lakh crore into semiconductor manufacturing units across the country. These investments are supported by the Indian government’s various incentive programs, such as the Production Linked Incentive (PLI) and Design Linked Incentive (DLI) schemes, aimed at fostering innovation and boosting local manufacturing.
India’s semiconductor sector is expected to play a key role in the country’s economic growth, as demand for chips continues to rise across various industries, including automotive, telecommunications, consumer electronics, and data centers.
The Indian government has also been taking significant steps to attract foreign and domestic investment into semiconductor manufacturing. In addition to financial incentives, the government is focusing on building infrastructure, developing skilled talent, and creating a favorable regulatory environment for semiconductor companies to thrive.
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Challenges in Setting Up Semiconductor Manufacturing Units
Despite the optimism surrounding India’s semiconductor ambitions, several challenges remain. Establishing a full-scale semiconductor fabrication facility requires vast capital, advanced technology, and a complex supply chain. India is still in the early stages of developing this infrastructure, and companies like L&T will need to navigate these hurdles carefully.
Building a semiconductor fab is also time-intensive, often taking several years to become fully operational. Furthermore, semiconductor manufacturing is highly specialized, requiring skilled engineers and technicians to manage production processes and maintain high-quality standards.
L&T’s fabless model, which focuses on design and outsourcing production to external manufacturers, mitigates some of these challenges in the short term. However, for India to realize its long-term semiconductor aspirations, the country will need to continue investing heavily in R&D, talent development, and infrastructure.
India’s Role in the Global Semiconductor Supply Chain
As global demand for semiconductors continues to grow, India’s emerging semiconductor ecosystem presents a significant opportunity to establish the country as a key player in the global supply chain. The Indian government’s efforts to attract investment and incentivize domestic production are critical to this process.
Companies like L&T Semiconductor are paving the way for India’s success in the semiconductor sector. By focusing on product design and innovation, and setting strategic goals for manufacturing, L&T is positioning itself to play a major role in India’s semiconductor journey.
Conclusion
L&T Semiconductor Technologies is taking a measured and strategic approach to building its semiconductor business. With a clear timeline for chip production, ambitious revenue targets, and a growing team dedicated to product development, L&T is laying the foundation for future success. As India continues to invest in its semiconductor ecosystem, L&T’s vision of becoming a major player in the global chip market is well within reach.
