L&T Semiconductor will consider an initial public offering only after crossing $500 million (about Rs 4,400 crore) in revenue, chief executive Sandeep Kumar said in an interaction with FE. He did not specify a timeline for the listing.
“We would do an IPO when our revenue crosses $500 million, and that is expected to take a while,” Kumar said.
Fabless model and product focus
The semiconductor arm of Larsen & Toubro is nearing two years of operations. It is pursuing a fabless model with no immediate plans to establish fabrication (fab) or outsourced semiconductor assembly and test (OSAT) plants. Instead, the company is focusing on product development, customer acquisition and selective acquisitions.
Since launch, the firm has built a core team, activated design programmes and closed two acquisitions. It is developing around a dozen products slated for release within the next year. L&T Semiconductor has also signed agreements with seven to eight companies, with roughly one-third based in India and the remainder in Japan, Europe and the US.
Kumar said demand is strongest in industrial and automotive applications, where development cycles typically take two to three years. The company has also entered the energy sector, which relies on silicon carbide rather than conventional silicon. “Silicon carbide producers generally operate their own fabs and foundries, so we have been cautious in entering this space,” he said. More recently, the company has begun building a presence in telecom.
Acquisitions and investment strategy
Acquisitions are central to its growth plan. Kumar cited the takeover of a Fujitsu unit, which he said brought product, technology and customer pipeline additions along with immediate revenue contribution.
Profitability, he said, differs across segments, with margins of 30–50% in foundry operations, 10–20% in OSAT, and 40–80% in OSAT plants.
The company has invested $100 million in research and development over the past two years, part of a $300 million commitment announced at launch. It was not eligible for the government’s first design linked incentive scheme as it was limited to startups, but expects to apply in the next phase if eligibility expands to all players.
Kumar said the semiconductor venture is part of the broader L&T Group strategy to expand into advanced technologies and diversify beyond traditional engineering and infrastructure.
