Larsen & Toubro’s bet on semiconductors is beginning to pay off. In a bold strategic move that signals its global intent, L&T Semiconductor Technologies Ltd (LTSCT) has acquired the power module business of Japan’s Fujitsu General for ₹118.34 crore —marking the company’s most significant deal since its inception in late 2023.

The acquisition, which includes Fujitsu General’s power semiconductor R&D team, IP, and product development assets, will give LTSCT a critical edge in one of the most competitive and high-growth areas of the chip market: power semiconductors. 

These components are essential to a wide range of high-growth sectors such as energy, automotive—particularly electric vehicles—and industrial applications like robotics, HVAC, and air conditioning. Moreover, power semiconductors operate at high voltages—ranging from 48 volts in compact electronics to 8,500 volts in energy infrastructure. Managing such levels of power, often running through devices carrying thousands of amps and generating up to 17 megawatts, demands extremely sophisticated packaging technologies—something Fujitsu had refined over decades.

The acquisition positions LTSCT to serve a global power semiconductor market that’s already north of $2 billion and growing, and will help accelerate the roadmap to provide advanced, high-power solutions across automotive, energy, and industrial sectors.

In an exclusive conversation with Fortune India, Sandeep Kumar, CEO, L&T Semiconductor Technologies Ltd says, “While EVs are a critical market for us, it’s important to recognize that India still represents a small share of the global EV market. So, a significant portion of our power module sales in this segment will be driven by international markets. On the other hand, sectors like HVAC, cooling, and energy infrastructure have far more immediate domestic demand, and we expect a large percentage of our sales in those areas to come from India.”

Kaynes to handle production, IP stays in-house

While as a part of the Fujitsu deal, LTSCT has acquired the complete business—including the IP, R&D capabilities, and technology, the company made a conscious decision not to take on the production facilities directly. Instead, the production part of the business will be transferred to Kaynes Semicon, an Indian entity building an OSAT (outsourced semiconductor assembly and test) plant in Sanand, approved under the India Semiconductor Mission. 

Kumar explains “Our business model currently is fabless, which means our focus is on owning the IP, driving the design, and building the core technology, rather than getting into manufacturing operations ourselves. Even for our chip designs, we rely on foundries for wafer fabrication and OSAT partners for packaging. The approach with the power modules follows the same principle. We will focus on design and R&D, and once the products are ready, Kaynes will take over the production process.”

Automotive pipeline shows billion-dollar potential

Automotive has been a significant focus area witnessing strong traction, and the company has already signed three agreements in the automotive sector so far. “In parallel, we are in advanced stages of discussions—or have already signed—agreements with seven to eight other major automotive clients across the globe. We expect many of these to materialize into firm customer commitments within the next 3-6 months,” says Kumar.

Once these commitments will be formalized, the design and development phases will begin, with deliveries expected to start next year. “The automotive contracts are typically long-term engagements, often spanning five years or more. Based on the agreements signed and those currently in the pipeline, we already have a line of sight to over a billion dollars in lifetime revenue over the next five years,” he adds. 

LTSCT has also expanded into the industrial sector with the acquisition of Fujitsu General's power modules business, and will cater to over 30 industrial customers. Moreover, in the energy sector — spanning solar, wind, and battery storage — the company is actively engaged, with product decisions expected in the coming months.

IP stack spans core and emerging domains

LTSCT’s semiconductor IP stack spans five key domains: power, analog, RF, digital, and compute/processor design, for scalable, application-specific semiconductor solutions across industrial, automotive and energy.  

“We are also expanding our portfolio in the Wide Band Gap Semiconductors - SiC & GaN. The superior efficiency, higher thermal performance, and faster switching capabilities—making them critical for next-generation applications in electric vehicles, renewable energy systems, and industrial automation,” says Kumar.

LTSCT has around 15 products under design & development that are tightly integrated with these IP blocks, ensuring differentiation at the system level. 

Acquisition-led growth strategy to plug capability gaps

And while the company’s primary focus remains on strengthening in-house capabilities, LTSCT actively assesses the ecosystem to identify critical gaps and pursue targeted opportunities to address them in a value-driven manner. “As part of our long-term roadmap, we are taking deliberate steps toward acquisitions that align with our core technology focus.” 

In line with this strategy, LTSCT had acquired Siliconch Systems last year, which was a strategic move to gain a significant head start in the areas of power management and System-on-Chip (SoC) design. “By successful integration we have been able to transform them from a design services model to a full-fledged semiconductor product company. Siliconch’s IP portfolio and engineering capabilities, further added to LTSCT’s ability to deliver differentiated, application-specific semiconductor solutions. We have already onboarded key customers and successfully accelerated the launch of analog and power management solutions—delivering power-efficient architectures and mixed-signal SoCs that are critical for energy-constrained and performance-driven applications,” says Kumar. 

Collaborations for next-gen compute

While the power side of the business is gaining visible traction, LTSCT is also working to develop high-performance compute chips in partnership with global and Indian institutions. One such partnership is with IBM. “We signed an Agreement with IBM around 9 months back to co-develop next-generation processors tailored for edge, industrial, and hybrid cloud applications. We are making significant progress on architecture definition, IP core development, and prototyping, with a roadmap targeting tape-out over the next 12–18 months.”

In parallel, LTSCT’s collaborations with C-DAC will result in transforming indigenous IPs into globally competitive products, focusing on ICs and SoCs. The partnership with IIT Gandhinagar is aimed at developing semiconductor solutions for projects of national importance.

“These collaborations, supported by our world-class R&D infrastructure and growing talent pool, ensure we remain at the forefront of semiconductor innovation, both in India and globally. While focusing on technology driven partnership we also getting into strategic business expansion collaborations,” says Kumar.

Built to design

Helping emerge India as a semiconductor hub, unlike most of the Indian conglomerates like the Tata Group and Murugappa Group have sought government subsidies to set up massive semiconductor fabs or testing plants, L&T mandate was clear from the outset: build an Indian semiconductor product company, not a contract design shop. 

“Our focus was to build an Indian semiconductor product company, creating IP that belongs to India, rather than simply manufacturing for others. The actual value lies in the product, and with India’s deep talent pool in chip design, we saw an opportunity to create globally competitive products from India,” says Kumar.

In just over a year, LTSCT has developed a strong pipeline with over 50 international and domestic names. “About 20-30% of our customers are India-based, around 30% are from Europe, and the US and Japan contribute roughly 20% each. These aren’t early-stage startups — these are established, global players,” adds Kumar. To serve these customers, LTSCT has 11 active design projects underway, and the company has already scaled the team to nearly 400 people. 

Despite growing calls for India to build domestic chip fabs, LTSCT has no immediate plans to set up its own fabrication plant. The strategy continues to focus on strengthening design capabilities and scaling revenue, with any consideration of a fabrication plant to follow at a later stage.