The chief executive of L&T Semiconductor Technologies, an Indian startup, announced on Tuesday that the company will be signing contracts with six vehicle companies by the end of September, making them its first clients.
According to CEO Sandeep Kumar’s interview with Reuters, the contracts have an annual total value of $150 million.
With a $100 million investment from its parent company, the largest infrastructure company in India, Larsen & Toubro, established a chip design division in November 2023. As of right now, the business doesn’t make money.
Kumar emphasized that the decision to prioritize the automotive sector was strategic, noting, “Our focus on automotive was intentional… The significant advantage here is that once you secure a foothold, the business typically kicks off within three years and has the potential to sustain for a decade.
Kumar also mentioned that the company plans to finalize agreements with three Indian automobile companies within the next two weeks, followed by three European companies in the same sector by the end of September. He refrained from naming the clients, as joint announcements are yet to be made.
L&T Semiconductors, competing with industry giants like Qualcomm and NXP Semiconductors, specializes in designing chips for automotive applications, including car body functions such as windows, air conditioning, and power delivery.
While L&T Semiconductors currently focuses solely on chip design, the company has future plans to establish its own manufacturing facility. “Once we have a clear path to $1 billion in sales, we will begin constructing a factory to produce our products,” CEO Sandeep Kumar stated. He anticipates reaching $1 billion in annual revenue within seven years.
“We need to ensure we have a robust pipeline of products and a solid customer base to justify building that factory,” Kumar added.
This year, the western state of Gujarat saw the establishment of the nation’s first semiconductor fabrication plant by Tata Electronics, a company controlled by the Tata Group.