Israel's Tower Semiconductors wants to build $8 bn chip manufacturing plant in India

Tower Semiconductor, an Israel-based leading chip foundry, has put forward a proposal to the Indian government to establish an $8 billion chip manufacturing facility in India, as reported by the national daily Indian Express on Sunday.

The proposed facility aims to produce 65 nanometre and 40 nanometre chips, aligning with Prime Minister Narendra Modi’s strategic agenda to boost semiconductor manufacturing in India. In December 2021, the Modi government unveiled a $10 billion scheme to bolster semiconductor production in the country.

According to the report, Tower Semiconductor is seeking government incentives to support its ambitious plan. Minister of State for IT Rajeev Chandrasekhar had previously met with Tower Semiconductor CEO Russell C Ellwanger in October last year to discuss the potential partnership between India and Tower Semiconductor in semiconductor manufacturing. The meeting also saw the participation of Naor Gilon, Israel’s Ambassador to India.

Tower Semiconductor’s involvement in India’s semiconductor ecosystem dates back to earlier initiatives. In 2013-14, the company was part of a consortium led by Jaypee Group, offering its expertise as a technology partner alongside IBM. In 2022, Tower Semiconductor, as part of the International Semiconductor Consortium (ISMC), applied to participate in India’s semiconductor scheme.

However, Tower Semiconductor’s application faced uncertainty due to Intel’s proposed acquisition of the company. Intel CEO Pat Gelsinger had previously indicated no immediate plans to establish a foundry in India. Nonetheless, with the Intel-Tower Semiconductor deal off the table, the Ministry of Electronics and IT renewed discussions with Tower Semiconductor.

Tower Semiconductor, renowned for its specialization in high-value analog semiconductor solutions, serves over 300 customers worldwide across diverse sectors including automotive, medical, industrial, consumer, aerospace, and defence. Despite challenges, the company has consistently expressed its commitment to support India’s semiconductor ambitions.

Ranked seventh in global foundry revenue according to TrendForce Q1-Q3 data, Tower Semiconductor’s annual revenue surpasses $1 billion, reflecting its significant presence in the semiconductor industry. As discussions progress, Tower Semiconductor’s proposed chip facility holds promise for advancing India’s semiconductor ecosystem and enhancing its position in the global semiconductor landscape.

(With inputs from agencies)