NEW DELHI: Larsen & Toubro (L&T) is all set to enter the business of fabless semiconductor chip design after the board of the company approved the plan. The company will make an initial investment of `830 crore to start the business. The company said more information on its semiconductor business will be intimated in due course. L&T’s chief financial officer R Shankar Raman in a conference call after the announcement of its second quarter results said the company will focus on design for fabless semiconductor chips as chip manufacturing is a highly competitive business.
“We believe it will take a lot to compete in (semiconductor chip) manufacturing space with the likes of Chinese, Taiwanese, and Korean firms, so that is not an area we are targeting at the moment,” Raman said.
He said its strategy is to focus on the “low investment” part of the supply chain. As per him, designs can be patented making the business more valuable.
Raman added that the company will focus on designing automobile and industrial chips at the moment as it will need lower investment. The government has pledged a $10 billion incentive to attract chipmakers to set up a semiconductor ecosystem in the country. Micron and AMD, two US based chip manufacturers, have already committed to invest $1.2 billion in India for manufacturing chips.