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India invites Tower Semiconductor, Israel for $10 billion chip mfg. scheme

ISRAEL-BASED chip manufacturing company Tower Semiconductor has revived its interest in India’s chip incentive scheme for a second time, and is considering setting up a semiconductor fabrication plant in the country, The Indian Express has learnt.

In August, Intel cancelled its plan to acquire Tower Semiconductor for $5.4 billion due to regulatory issues.

If Tower’s proposal comes through, it would be the first semiconductor company with real fabrication pedigree to apply for India’s $10 billion chip manufacturing scheme, and could be a big boost to New Delhi’s chipmaking ambitions.

Asked about Tower Semiconductor’s renewed interest in India’s chip incentive plan Minister of State for Electronics and IT Rajeev Chandrasekhar told The Indian Express the government has invited its CEO Russel C Ellwanger to discuss its partnership with India in the chip space.

Chandrasekhar had met Ellwanger earlier this week along with Naor Gilon, Israel’s Ambassador to India. He, however, declined to comment if the company would apply under the chip making scheme.

Tower Semiconductor did not respond until publication to a request for comment.

The Israeli company is best known for older technology that produces analog chips used for tasks such as amplifying signals and managing power in cell phones and other products.

“The pending merger had put Tower’s investment plans in India on hold. But now that the acquisition has fallen through, the company has shown an interest in investing in the chip incentive scheme yet again,” said a senior government official, who did not wish to be named.

“However, there are still some considerations given the ongoing situation between Israel and Palestine which the company will have to navigate,” the official said.

While India has managed to attract big names such as Micron Technology to set up a chip packaging plant in the country, it is yet to receive a feasible application for a fabrication plant.

While securing Micron’s $825 million investment commitment for its packaging plant was a big win for India’s chip ambitions, having a chip foundry would be an big milestone and help draw further investments in the chip space.

International consortium ISMC, backed by Abu Dhabi-based Next Orbit and Tower Semiconductor, had earlier asked the Centre not to consider its proposal owing to the pending merger. The consortium had initially said it would set up a $3 billion semiconductor fab in Karnataka.

The planned merger between Intel and Tower, announced in February 2022, passed an antitrust review in the United States and several other geographies. But it ran into a lengthy delay in China, where regulators review mergers of companies that earn a certain amount of revenue in the country.

A joint venture between Foxconn, best known as the manufacturer of iPhones, and Vedanta to set up a $19.5 billion chip plant came to an abrupt halt earlier this year. Foxconn announced it was pulling out of the joint venture with Vedanta. While government sources maintain the two could apply separately, there has been no movement so far.

There was a third fab proposal by Singapore-based IGSS Venture, but it was not found up to the mark by the advisory committee of the government and is on the back burner, it is learnt. Indian Express

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