Israeli Chipmaker Tower
If the government accepts Tower’s proposal, it will mark the entry of the first semiconductor company with a genuine fabrication background into India’s $10 billion chip manufacturing scheme. This development will greatly enhance New Delhi’s aspirations in the field of chipmaking.
The Indian Express has obtained information that Tower Semiconductor, a chip manufacturing company based in Israel, has presented a proposal to establish a chip fabrication plant in India valued at approximately $8 billion. The government is currently evaluating the proposal and aims to approve it before the implementation of the model code of conduct for the upcoming general elections this year.
If the government accepts Tower’s proposal, it would mark the entry of the first semiconductor company with significant fabrication expertise into India’s $10 billion chip manufacturing initiative. This development would greatly enhance New Delhi’s aspirations in the field of chipmaking.
The successful applicants will receive a 50 percent capital expenditure subsidy under the scheme. This means that if Tower’s plant costs $8 billion, the Centre will provide $4 billion from its funds. Additionally, any state where the chip foundry could be located may offer further benefits to the company.
Tower aims to produce 65 nanometre and 40 nanometre chips in India, which can be utilized in various sectors such as automotive and wearable electronics.
In October last year, Minister of State for Electronics and IT Rajeev Chandrasekhar held a meeting with Tower’s CEO Russel C Ellwanger to discuss their partnership in the chip industry with India.
Tower had previously submitted an application for the establishment of a $3 billion plant in Karnataka, in collaboration with the international consortium ISMC. However, the progress of this plan was hindered by Tower’s impending merger with Intel at that time. In August of last year, Intel decided to cancel its proposed acquisition of Tower Semiconductor for $5.4 billion, citing regulatory complications.
The proposed merger of Intel and Tower, which was announced in February 2022, successfully underwent antitrust scrutiny in the United States and various other regions. However, it encountered a significant delay in China, where regulators thoroughly assess mergers involving companies that generate a specific level of revenue within the country.
Recently, CG Power and Industrial Solutions disclosed that it has established a joint venture (JV) with Renesas Electronics America and Stars Microelectronics, based in Thailand. The purpose of this collaboration is to establish a semiconductor assembly and testing facility in India.
Despite successfully attracting companies like Micron Technology to establish a chip packaging plant in India, the country still faces the challenge of obtaining approval for a complete fabrication plant. Although securing an investment commitment of $825 million from Micron for the packaging plant is a significant achievement for India’s chip aspirations, the establishment of a chip foundry would serve as a major milestone and encourage additional investments in the chip industry.
“In a stunning turn of events, the $19.5 billion chip plant joint venture, a collaboration between Foxconn, the iconic iPhone manufacturer, and Vedanta, came to an unexpected halt last year. The abrupt withdrawal was announced by Foxconn, leaving industry observers and government officials perplexed about the future of this ambitious venture.
Speculation about the next steps has been rife, with government sources hinting at the possibility of the two parties reapplying separately. However, despite the optimism, progress seems elusive, casting a shadow over the once-promising project. The unresolved status of this venture underscores the intricate challenges and delicate negotiations involved in mega-deals of this scale.
Adding another layer of complexity to the semiconductor saga is the revelation that a third fab proposal, spearheaded by Singapore-based IGSS Venture, has hit a roadblock. Government advisory committee standards have not been met, placing the proposal in a temporary state of suspension. This setback underscores the stringent criteria set by authorities in their pursuit of fostering high-quality and technologically advanced chip manufacturing facilities.
The impasse in these high-stakes ventures raises questions not just about the specific circumstances surrounding each proposal but also about the broader landscape of global semiconductor production. The intricate dance between technological ambitions, regulatory scrutiny, and economic considerations is playing out on a grand stage, impacting not only the involved corporations but also shaping the trajectory of a crucial industry.
As the dust settles on these developments, the fate of the chip plant joint venture and the IGSS proposal remains uncertain. The narratives of these ventures serve as a cautionary tale, highlighting the challenges inherent in navigating the complex terrain of cutting-edge technology collaborations and the intricate web of regulatory approvals. The ebb and flow of these ventures, filled with suspense and uncertainty, continue to captivate industry experts and enthusiasts alike, awaiting the next chapter in the unfolding drama of the semiconductor industry.”