Larsen and Toubro (L&T) announced on 31 October 2023 that it will be investing ₹830 crore ($99.69 billion) to set up a wholly-owned subsidiary that will be engaged in the business of fabless semiconductor chip design and product ownership.
This foray into the semiconductor was announced by the company's chief financial officer R Shankar Raman during the second quarter earnings announcement.
Raman said that the focus would be on automotive and industrial chip designing. The company is likely to have a research and development centre in the US and a few design centres in India. L&T will only be focusing on chip design and not manufacturing and tapping into the ‘talent pool of chip designing in India’.
Notably, at the Hindustan Times Leadership Summit this week, Union Minister for electronics and information technology Ashwini Vaishnaw said that in the next five years, India is set to emerge as the design and manufacturing hub for semiconductors.
He announced the plans to skill 80,000 people in semiconductor-related skills. Vaishnaw further predicted that the global semiconductor market would double in the next 6-7 years to over a trillion dollars in value.
To be sure, the engineering and construction conglomerate L&T reported a 19% increase in the company’s revenue from operations in the second quarter to ₹51,024 crore.
The company’s net profit also rose to ₹3,222 crore, up by 45% as compared to ₹2,228 crore in the year-ago period. Additionally, Ajay Tyagi has been appointed an independent director of the company for five years, effective from October 31, along with PR Ramesh.
