Larsen and Toubro board has approved the plan to enter the business of fabless semiconductor chip design. Initially, the company has decided to invest Rs 830 crore to start the business. Company’s chief financial officer R Shankar Raman in a conference after the announcement of its second quarter result mentioned that the company will focus on chip designing and not chip manufacturing.
“We do believe in the talent pool of chip designing in India,” he said, adding “We have decided to stay at the design end of it.”
Further, he mentioned the competition in manufacturing”We do believe that it would take a lot to compete on the manufacturing side with the likes of Chinese, Taiwanese, and Korean companies That’s not an area that we are targeting at the moment,”
He mentioned that multiple multinational corporations had set up their chip design center in India which has given confidence to them. As per the statement, the company’s strategy is to focus on the low-investment part of the supply chain. As per him, design can be patented making the business more valuable.
Raman also mentioned that the company will focus on designing automobiles and industrial chips at the moment as it needs lower investment.
