L&T eyes buys to develop chip design business
In a bid to grow its recentlylaunched semiconductor business, Larsen & Toubro will look for acquisitions of companies with a client base.
R Shankar Raman, who has been elevated as President, Whole-time Director & Chief Financial O©cer of L&T, told businessline that such acquisitions will not be for technology but for generating business.
“We could look at acquisitions of entities that are already working on specific chip design projects. We are not looking for technology partners because that will constrain us to certain technology and certain markets,” Raman said.
GLOBAL TEAMS
The Mumbai-headquartered company has invested ₹850 crore in setting up a wholly
R Shankar Raman, President, Whole-time Director & CFO of Larsen & Toubro
owned subsidiary, L&T Semiconductor Technologies. Raman said that L&T is in the process of assembling a team for the new business.
“We will not venture into manufacturing, fab foundry, test packaging but we are into chip design. We want to remain technology agnostic. We want to cater to energy, communication, automobile companies and wider industrial applications,” he said.
Further, the company is aggressively setting up teams in the international market to ramp up the semiconductor business.
“Our e«ort is to identify teams that can work on designing chips and that can break ground with product and original equipment manufacturers. The business development and marketing team is being assembled in the US, Europe and Japan. These are the large markets that will order from us in addition to India,” he said.
GOVT SUBSIDY
While the government, in its
“We are aggressively setting up teams in the international market to ramp up the semiconductor business”
Interim Budget, allocated ₹6,903 crore for semiconductors, L&T will apply for a subsidy if it is extended to designing.
“If the government subsidy gets extended to chip design, we will apply for it. Though we have a strong balance-sheet and in some way need not depend on subsidies, the overall economics makes the product more competitive and we could scale up faster using the subsidies,” Raman added.
The semiconductor ecosystem consists of three parts: Designing, manufacturing and testing. India’s semiconductor ambition is picking up steam with several companies announcing big ticket investments. The Tata Group has announced the setting up of a semiconductor fabrication unit. US-based Macron has announced investments for semiconductor testing. Also, multinationals like Qualcomm are doing chip designing in India.