Larsen & Toubro Plans to Invest USD 300M in Chip Venture

Larsen & Toubro Ltd. intends to allocate over $300 million towards establishing a chip company, following other Indian conglomerates in an effort to develop a semiconductor industry in the most populous country in the world.

The technology-focused construction company plans to invest the funds over a three-year period in order to create a fabless chipmaker, a company that designs and sells semiconductors but outsources their manufacturing. The head of L&T Semiconductor Technologies, Sandeep Kumar, stated that the company aims to create 15 products by the end of the year and launch sales in 2027.

Both global and local corporations are aiming to take advantage of India's initiative to boost local semiconductor production and reduce costly imports by securing government subsidies. Rising tensions between Beijing and Washington are pushing electronics manufacturers, such as chipmakers, to expand their operations beyond China and Taiwan, with India reaping the benefits.

L&T's investment is small when compared to the expenses of major fabless chipmakers like Nvidia Corp. and Advanced Micro Devices Inc. The company from India focuses on developing power chips, radio-frequency semiconductors, and mixed-signal integrated circuits instead of AI-enabling graphics processing units.

“Automotive, industrial and energy — those are the sectors we’ve picked as they are going through very heavy transformation,” Kumar said. “There is space to compete, succeed and even capture the market.”