New Delhi — L&T Semiconductor Technologies, a leading fabless chip company, is making significant strides toward establishing its semiconductor manufacturing capabilities. According to CEO Sandeep Kumar, the company anticipates starting production of its semiconductor products within the next two years, marking a pivotal moment in India’s chip industry.
Plans for Manufacturing Facilities
The CEO highlighted that L&T Semiconductor will initiate its manufacturing operations after achieving a revenue milestone between $50 million and $1 billion across various semiconductor technologies. This strategic approach is aimed at ensuring sustainable growth and reducing dependence on foreign firms.
L&T Semiconductor is currently building teams to handle approximately 15 different product designs simultaneously. Kumar noted that the company is already halfway through this phase, with six product designs currently in progress. By the end of the year, L&T aims to be fully equipped to manage all 15 designs, paving the way for the official launch of these products by late next year.
Strategic Value of Domestic Production
Kumar emphasized the importance of starting as a fabless chip firm to diminish India’s reliance on foreign technology providers. He pointed out the risks associated with manufacturing for external clients, highlighting the potential for those clients to switch foundries or face financial instability. Kumar’s vision is clear: to create products that hold strategic value for India.
He further articulated concerns about the future of the Indian technology sector, particularly if foreign nations decide to cease technology sharing. “If an indigenous company makes a product, then it is assured that the product is strategically retained in India,” Kumar stated.
Collaborations and Partnerships
In its pursuit of innovation, L&T Semiconductor has established partnerships with several leading firms in the semiconductor sector. Recently, the company signed a collaboration agreement with IBM, focusing on research and development for advanced processors. This partnership is set to explore processor designs for a variety of applications, including mobility, industrial energy, and hybrid cloud systems.
Investments and Future Prospects
L&T Semiconductor’s entry into the manufacturing space aligns with a broader trend of substantial investments in India’s semiconductor sector. Other prominent players, such as Tata Electronics and Micron, are also setting up manufacturing units, collectively contributing to a cumulative investment of ₹1.52 lakh crore. This momentum reflects a growing recognition of the strategic importance of semiconductors in various industries, from consumer electronics to electric vehicles.
The path to establishing manufacturing facilities is not without its challenges. Kumar noted that setting up a 28-nanometer fab could require around $10 billion, necessitating a robust sales outlook of approximately $1 billion per year to ensure profitability. Smaller nodes, like the 2-5 nm range, may necessitate even larger investments, estimated at around $100 billion.
As L&T Semiconductor Technologies prepares to launch its chip production, industry stakeholders and investors alike are watching closely. Will this ambitious venture yield the anticipated profits?
Public Opinion
The developments in L&T Semiconductor’s plans present an intriguing question: What are your expectations for profitability in this venture?
