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Larsen & Toubro has approved an investment of ₹830 crore to set up a wholly-owned subsidiary that will be engaged in the business of fabless semiconductor chip design and product ownership.
Talking about it during the media interaction to discuss the company’s Q2 results, CFO R Shankar Raman said it would be focusing only on chip design and not on manufacturing. “We do believe in the talent pool of chip designing in India,” he said, adding, “we have decided to stay at the design-end of it.”
He pointed out that many multinational corporations had set up their chip design centres in India and this has given them the confidence to participate in the opportunity that was opening up for chips and semiconductors.
“We do believe that it would take a lot to compete on the manufacturing side with the likes of Chinese, Taiwanese and Korean companies That’s not an area that we are targeting at the moment,” he said.
He observed that Covid had shown how semiconductor shortage could affect production and the economy as well.
The group already had domain expertise in engineering design through its subsidiary L&T Technology Services. The company would open up a couple of design centres in India and most likely a R&D centre in the US. He said that the focus would be on automotive and industrial chip designing.
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