Along with other Indian corporations, Larsen & Toubro Ltd. intends to invest over $300 million to establish a chip firm in the nation with the largest population in the world. The funding will be used over the course of three years by the tech-to-construction firm to launch a fabless chipmaker, which creates and markets semiconductors but outsources their manufacturing. Sandeep Kumar, the Head of L&T Semiconductor Technologies, stated in an interview that the company intends to create 15 items by the end of this year and begin sales in 2027.

Both domestic and international businesses are attempting to take advantage of India's efforts to reduce costly imports and increase domestic semiconductor production in order to obtain government subsidies. Chipmakers and other electronics manufacturers are expanding their business outside of China and Taiwan due to the ongoing tensions between Beijing and Washington. This is helping India become a bigger market.

Comparing L&T's investment to the sums made by major fabless chipmakers like Advanced Micro Devices Inc. and Nvidia Corp., it is little.Rather than focusing on sectors like AI-enabling graphics processing units, the Indian business targets items like power chips, radio-frequency semiconductors, and mixed-signal integrated circuits. "We have chosen the automotive, industrial, and energy sectors because they are undergoing significant change," Kumar stated. "There is room to thrive, compete, and even take market share."

Globally, semiconductors have become an increasingly valuable resource, particularly in light of the US-China trade spat's potential to drive up the cost of chip imports. The US, Germany, Japan, and Singapore are among the nations increasing their domestic chip production in an effort to guarantee a supply of the parts required for technologies ranging from artificial intelligence to electric vehicles.

Currently, the majority of the 250 employees at L&T Semiconductor Technologies are chip designers. By the end of 2024, it will quadruple that, according to Kumar. According to him, the corporation has asked the government to assist in chip design subsidies or incentives for big businesses, but it will not look for money from sources other than the L&T group.

The government of Prime Minister Narendra Modi has devised a $10 billion initiative aimed at courting semiconductor manufacturers and their vendors. As a result of this strategy, the US memory manufacturer Micron Technology Inc. established a $2.75 billion assembly plant in Gujarat, the home state of Modi, and the Tata Group built the nation's first significant chip factory. Together with an Israeli partner, the Adani Group intends to construct a chip facility. In a public briefing this week, the director of a governmental body that authorizes funding for chip projects stated that India is open to growing the $10 billion semiconductor fund.