We need to create something that’s going to sustain us: L&T
Larsen and Toubro (L&T) is following in the footsteps of other Indian conglomerates like Vedanta and Tata Group, foraying into fabless semiconductor chip design. The company plans to invest Rs 830 crore through a wholly-owned subsidiary which will be engaged in the business of fabless semiconductor chip design for the automotive as well as industrial sector. L&T chief financial officer, R Shankar Raman tells Kalpana Pathak and Romita Majumdar, that as part of the company's strategic plan, it has always been looking for alternate sources of business for future.
Edited excerpts:
What is the strategy behind foraying into chip design?
We have formed a subsidiary called L&T semiconductor systems and solutions limited. This will be wholly owned by L&T and will focus on chip design. So the semiconductor industry, which is about $27 billion in India, in today's terms is expected to be about $50 billion dollars by 2030 which is considerable in seven years.
We have some domain expertise between L&T and LTTS to get started with chip design. We thought we will look at a design which is investment free, a fabless design, it will be an analog chip on that mature node. So we marked our area where we could have a chance of participating profitably in this industry.
The end users will be automatically based on this chip design that we have chosen — automobile industry and industrial applications and then maybe some energy because we are in the field of energy. There is something on the energy transmission, energy load management, energy distribution management, which are all chip dependent.
Will this be for domestic consumption?
Need is global. I think in India, most of the chips that are designed are directed by the global majors who
