Larsen & Toubro (L&T) has moved a key part of its semiconductor strategy to India by shifting chip assembly operations closer to the domestic market, as the engineering major looks to build a stronger presence in the global semiconductor supply chain.
The move comes as India accelerates efforts to develop local semiconductor capabilities under the India Semiconductor Mission.
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L&T Expands Semiconductor Footprint in India
L&T Semiconductor Technologies (LTSCT), the company’s semiconductor arm, is focusing on building capabilities across chip design, product development and manufacturing partnerships.
Unlike traditional chip manufacturers, the company has been following a fabless approach. In this model, designs are developed in-house, while production and packaging are handled through external partners.
The company’s move to shift assembly operations to India reflects the wider industry trend of bringing more stages of semiconductor production into the country.
Chip assembly and testing, known as outsourced semiconductor assembly and test (OSAT), has become an important entry point for India’s semiconductor ecosystem, with several large projects announced across states including Assam, Gujarat and Uttar Pradesh.
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India’s Semiconductor Supply Chain Gets New Momentum
The shift comes at a time when global companies are looking to diversify semiconductor supply chains beyond traditional manufacturing hubs. India has been attracting investments in chip packaging, testing and manufacturing as demand rises from sectors such as automobiles, telecommunications, artificial intelligence (AI), consumer electronics and industrial equipment.
L&T Semiconductor has previously outlined plans to develop specialised chips for industries including automotive, communications and industrial applications. The company has said it is not targeting mass-market processor manufacturing but is focusing on customised semiconductor solutions.
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L&T’s Semiconductor Ambition
The company has also been evaluating a larger semiconductor manufacturing roadmap. L&T Semiconductor Technologies has indicated that a future fabrication plant would depend on achieving sufficient business scale and customer demand. Earlier plans included a potential investment of more than $10 billion for a semiconductor fabrication facility once revenue visibility improves.
For India, the development highlights a broader transition from being mainly a chip design destination to becoming part of the complete semiconductor value chain, covering design, assembly, testing and eventually manufacturing.
L&T’s move reflects a larger industry shift where semiconductor supply chains are being rebuilt closer to major markets. While India still has a long journey ahead in advanced chip manufacturing, strengthening assembly and testing capabilities could provide the foundation needed for a deeper semiconductor ecosystem.
The next phase will depend on execution, skilled workforce availability and the ability of domestic companies to convert investments into commercially viable semiconductor products.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!
