L&T Semiconductor Technologies is betting on India's accelerating economic growth and rising demand in sectors such as air conditioning, data centers, and renewable energy to fuel its power module business, as it targets the global market, CEO Sandeep Kumar told DIGITIMES ASIA.
The company is acquiring the power modules business of Japan's Fujitsu General for about JPY2 billion (US$12.8 million), in a deal that also includes the transfer of associated production facilities to Kaynes Semicon, its manufacturing partner.
Growth driven by cooling demand
"There are two major India-focused strategies that are critical to our business plan," Kumar said. "First, as income levels rise and the housing sector booms, the need for air conditioning and refrigeration is surging."
He noted that inverter-based HVAC systems rely on power modules, a trend being accelerated by strong sales from global players like Daikin, Fujitsu, Sanyo, and Voltas. Data center cooling, another power-hungry segment, is also gaining momentum in the country.
Energy transformation creates opportunities
The second growth pillar is India's energy transformation. As industry scales and the economy expands, the country is witnessing one of the fastest growth trajectories globally in solar, wind, and other renewable energy sources.
"All of these require power modules and semiconductors," Kumar said.
Electric vehicles (EVs) are also part of the company's portfolio, but Kumar emphasized that India represents only a small fraction of the global EV market.
"While we will sell power modules to the EV sector, much of that business will be outside India. But in HVAC, cooling, and energy, India will be a major contributor to our sales," he added.
Technical complexity demands expertise
Power semiconductors are a strategic focus area for the company. Used in sectors ranging from energy and EVs to industrial robotics, power modules must withstand demanding conditions, with some devices handling up to 8,500 volts and 2,000 amps—equivalent to around 17 megawatts of power in a single unit.
"That generates a lot of heat and current. The packaging of such high-power modules is one of the most critical technologies," Kumar said.
L&T Semiconductor's recent acquisition of Fujitsu's power module business grants it access to advanced packaging technology, a move Kumar said positions the company to compete in a global market valued at more than US$2 billion.
However, entering global energy markets remains a long-term strategy. "In HVAC, refrigeration, and data centers, global demand is strong. But in the energy sector, breaking into mature markets is difficult," Kumar said, citing entrenched supplier relationships, high switching costs, and stringent reliability and certification requirements.
Nevertheless, he sees India as a proving ground. "Once the product is established and field-proven in India, global customers may warm up to it," he said.
Deep IP more valuable than raw talent
One of India's well-recognized gaps in its semiconductor strategy is the lack of skilled manufacturing talent. But Kumar believes design talent is not the issue.
"In design, India actually has a surplus of talent compared to the rest of the world," he said. "The challenge is on the manufacturing side, as India has no fabs or OSATs, so experience there is limited.
In power modules specifically, the challenge goes deeper. "It's less about manufacturing and more about material science and metallurgy," he said.
According to Kumar, only Japan and Germany currently have the deep scientific expertise to design and produce automotive- and energy-grade power modules that can last 10 to 30 years.
"Whether it's Hitachi, Fuji, Mitsubishi Semiconductors, or Infineon—these are the only real power module suppliers globally," Kumar said. "Even China imports power modules and is still trying to build that know-how."
Kumar said the Fujitsu acquisition is less about staffing and more about bringing critical intellectual property and proven design capabilities to India. "Talent is a part of it, but the real value lies in the deep IP and product design expertise. This acquisition brings that critical knowledge base into the country."
Article edited by Jerry Chen
