“India Cannot Become A Semiconductor Powerhouse With Fabs Alone”

SANDEEP KUMAR, Chief Executive, L&T Semiconductor Technologies, discusses the company’s product and design focus, long revenue cycles, and the opportunities in energy and power in a conversation with BW Businessworld’s Rohit Chintapali

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L&T Semiconductor Technologies was set up at a time when India’s semiconductor conversation was heavily focused on fabs. What was the thinking behind starting with product design instead?

The thinking was very simple. Building fabs is important and good for the country, but someone has to build products that go into those fabs. Our view is that India needed strong product companies, not just factories. So we decided to focus on products rather than fabs. What we set up is a fabless design company. At scale, we are the first product company of this kind in India. There are many startups doing product design, but they don’t have this scale or long-term backing.

At the time of India Semiconductor Mission 1.0 (ISM 1.0), design was not as prominent in policy conversations. How do you see this changing in ISM 2.0?

ISM 1.0 was largely built around fabs, OSATs and manufacturing. We had discussions with the government and said that while factories are important, you also need to incentivise product build-out. That thinking has started to evolve. ISM 2.0 has more clarity that design is critical. DLI exists, though it is more startup-focused today. Going forward, I expect more policy support that recognises the longer gestation and capital intensity of product companies like ours.

Semiconductor product companies are known for long revenue cycles. How should one look at your ramp-up timeline?