L&T Plans To Set Up Three Chip Fabrication Units In India With $12 Billion Investment

L&T Semiconductor Technologies (LTSCT) is reportedly planning to establish three semiconductor fabrication units in India within the next five to ten years, with investments estimated between $10-12 billion.

The LTSCT is the group’s newest business vertical that aims to become a multinational semiconductor player.

“The vision is to become the first global company in semiconductors operating from India, headquartered here, with a footprint across US, Europe, Japan and India," the company's chief executive officer Sandeep Kumar was quoted as saying by Livemint.

Kumar said that LTSCT’s shift from a system-on-chip (SoC) design company, like Qualcomm or Mediatek, to a chip manufacturing entity will depend on reaching a revenue milestone of $1 billion.

“Our goal is to generate enough line of sight to get $1 billion annual revenue, which could be within the next two, three years, then I can start building my factory or fab,” Kumar said, adding that it would need to produce and sell 500 million chips.

Kumar further explained that the company is engaged in various technologies, including high-end silicon chips and mid- to low-end silicon carbide and gallium nitride chips. As a result, three distinct fabs will be established over time, each requiring varying levels of investment.

Kumar said that investment decisions will hinge on returns and the availability of financial incentives from the Indian government at that time.

“For silicon, (investment) is $10 billion-plus. Silicon carbide is in the range of $1 billion-plus and then gallium nitride can be in the range of $500 million,” Kumar said.

He also stressed that a robust order book would be essential to operate the fab at full capacity, ensuring the production of chips at globally competitive prices.

“On silicon, all the partner details are in place. On gallium nitride, it is halfway there, and silicon carbide I have 15 different discussions going on, so within the next three months we will have nailed down who will be working with,” Kumar added.

According to Kumar, revenue streams are expected to commence shortly as the company expects closing six automotive deals worth $150 million in the next two months.

These will include orders from three major Indian companies, while three large European clients are expected to place orders by October this year.

LTSCT is set to target the automotive, energy, and industrial sectors, producing mixed-signal, smart power, smart analogues, smart sensing, and smart RF solutions, as well as SoCs.

The company is working across various nodes and technologies, with silicon chips ranging from 40nm to 7nm for digital use being designed in-house and manufactured by Taiwan’s TSMC.

The mixed-signal digital process for power and analogue chips, ranging between 130nm and 28nm, on silica are being made by Global Foundries in the US.

Silicon carbide chips are being produced by two Japanese partners, while chips for radio frequency and power devices based on gallium nitride will be manufactured by Global Foundries and Taiwan’s VIS Technologies.

Kumar also noted that the company's employee count has increased to 200 over the past six months and is expected to reach 500 by February 2025, spanning across India, the US, Europe, and Japan.

L&T’s semiconductor division was established in 2023 with a capital outlay of Rs 830 crore for fabless chip design, as part of the conglomerate’s strategic shift towards technology under the leadership of chairman and managing director S N Subrahmanyan, who succeeded A M Naik in 2017.

L&T has also ventured into data centres, electrolyser manufacturing, and battery energy storage, all considered next-generation high-tech businesses.

Green businesses contributed half of the group’s standalone revenues in FY24.

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