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Indian government is expected to contribute a staggering 90% of the costThe announcement comes as fab demands is heating up on the back AI explosive growthConstruction of these fabs is a very long process and always lags demand, sometimes by years
L&T Semiconductor Technologies (LTSCT), a fabless chip startup supported by Larsen & Toubro, is embarking on an ambitious $10 billion plan to establish a wafer fabrication facility in India. This move is a part of the growing landscape of semiconductor manufacturing, which is rapidly gaining momentum in response to the explosive growth within the artificial intelligence sector.
According to a report from eeNews Analog, the success of this ambitious project is contingent upon LTSCT achieving annual revenues of $1 billion by the fiscal year 2026-2027.
LTSCT was established in 2023 as a fully owned subsidiary of Larsen & Toubro, focusing on designing a variety of semiconductor products such as MEMS sensors, analog and mixed-signal integrated circuits, RF chips, and smart power devices. Although the startup has yet to commence chip production, CEO Sandeep Kumar anticipates that commercial manufacturing will kick off in the latter half of 2025.
Increasing ABF production by 50%
Kumar mentioned in an interview with Business Standard that establishing a fab plant will necessitate an investment exceeding $10 billion, with the company needing to contribute around $1 billion, even after accounting for subsidies. The initiation of the fabrication facility is conditioned on reaching the projected revenue target.
A significant factor aiding LTSCT’s strategy is the Indian government’s semiconductor initiative, which includes a $10 billion incentive program introduced back in 2021. This push is designed to enhance local semiconductor production capacity nationwide.
As highlighted by eeNews Analog, LTSCT envisions a long-term transition from being a fabless design enterprise to becoming an integrated device manufacturer (IDM). This shift represents a significant evolution in the company’s business model as it aims to enhance its operational capabilities in the semiconductor space.
The startup has already secured more than $300 million in investments from its parent company, Larsen & Toubro, which will aid its design initiatives aimed at developing a portfolio of 15 chip products by the year 2027.
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