Israel's Tower Semiconductor proposes $8 billion chip plant in India: Report

Israel's Tower Semiconductor has submitted a proposal to build an $8 billion chip-making facility in India, The Indian Express reported on Sunday. Tower, seeking government incentives for its plan, is looking to manufacture 65 nanometre and 40 nanometre chips in the country. 

Semiconductor manufacturing is Prime Minister Narendra Modi's key business agenda, for which his government rolled out a $10 billion scheme in December 2021. 

Minister of State for IT Rajeev Chandrasekhar has in October last year met with Tower Semiconductor CEO Russell C Ellwanger. The meeting was also attended by Naor Gilon, Israel's Ambassador to India. According to Chandrasekhar, the two discussed the India-Tower partnership in semiconductors.

Also read: Davos 2024: 'Micron India plant to roll out first chip by December 2024,' says IT minister Ashwini Vaishnaw

In 2022, the International Semiconductor Consortium (ISMC), of which Tower Semiconductor is a part, applied to be part of India's semiconductor scheme. However, at the time Intel proposed to acquire Tower Semiconductor. Due to this development, the decision on the consortium’s application was put on hold as the government wasn’t sure of Intel’s plan for letting Tower continue with the consortium post the acquisition was complete. 

When Intel CEO Pat Gelsinger met Prime Minister Modi and MeitY Minister Ashwani Vaishnav in 2022, the company had told Business Today that there were no plans to set up a foundry in India anytime soon. But with the Intel-Tower Semiconductor deal off, the Ministry of Electronics and IT was once again in touch with Tower Semiconductors. 

Also read: MoS Rajeev Chandrasekhar meets Israel’s Tower Semiconductor CEO, discusses possible partnerships
 

But why Tower Semiconductor?

Tower Semiconductor is an Israel-based leading foundry of high-value analog semiconductor solutions. It specialises in manufacturing analog integrated circuits for more than 300 customers worldwide in growing markets such as automotive, medical, industrial, consumer, aerospace, and defence, among others. It was ranked seventh in global foundry revenue with $356 million as per TrendForce Q1-Q3 data, and its annual revenue is likely to be well over $1 billion.

Tower is one of the foundries that has time and again offered to help India build its semiconductor ecosystem. Even in 2013-14, Tower Semiconductor was a part of a consortium led by Jaypee Group where it would have been a technology partner along with IBM. The company once again offered to be a technology partner and this time with International Semiconductor Consortium (ISMC) which had submitted in February 2022 an application under India's Rs 76,000 crore semiconductor incentive scheme for a 65nm technology node analog fab.

Micron in India 

US chipmaker Micron Technology in June last year announced an investment of $825 million to set up a new assembly and test facility in Gujarat. It said Phase-1 construction of the new assembly and test facility will become operational in late 2024. The US firm said that it expected Phase 2, which would include the construction of a facility similar in scale to Phase 1, to start towards the second half of the decade.

In January this year, Ashwini Vaishnaw said Micron will roll out its first chip in the country by December 2024.