L&T Semiconductor Technologies unveils $10 bn fab plan
Huge silicon fabrication plant investment dependent on revenue targets
L&T Semiconductor Technologies (LTSCT), a subsidiary of Larsen & Toubro, has unveiled a plan to invest over $10 billion in a silicon fabrication (fab) plant. The investment depends on achieving at least $1 billion in annual revenue by 2026-27 from selling its designed and patented semiconductor products, which are currently manufactured by third parties.
Sandeep Kumar, CEO of LTSCT told Business Standard that rather than following the foundry model of Taiwan Semiconductor Manufacturing Company (TSMC), LTSCT aims to produce its own semiconductor products. “A fab plant will require an investment of over $10 billion. Even with subsidies, it will mean an investment of $1 billion,” Kumar said.
To recover this capital outlay, the plant will have to operate at 95% capacity, generating $1 billion in annual revenues. The company plans to decide on building the plant by 2031, based on visible revenues by 2026-27.
LTSCT is also exploring the potential of setting up compound fab plants using gallium nitride (GaN). These plants cost around $1.5 billion and require $150 million in annual revenues to be feasible. Currently, the company is focusing on designing and selling semiconductor products in niche areas like radio frequency and sensors.
Kumar added that LTSCT targets segments with less competition, avoiding large markets such as mobile and personal computers. The company plans to launch its products in the middle of the year and will initially manufacture them at third-party global foundries.
By targeting niche markets and emphasizing innovation, and bolstered by its substantial investment plans, LTSCT is confident of making significant progress in the semiconductor industry.
