Tower Semiconductor proposes $8 bn chip plant in India: Report

Tower Semiconductor, a leading Israeli chipmaker, has reportedly submitted a proposal to the Indian government for the establishment of an $8 billion chip manufacturing plant in the country.

According to a report by Indian Express published on Sunday, the proposed facility aims to produce cutting-edge 65 nanometre and 40 nanometre chips, catering to diverse sectors such as automotive and wearable electronics.

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This move follows a meeting held in October 2023 between India’s Minister of State for Electronics and IT, Rajeev Chandrasekhar, and Tower Semiconductor’s CEO, Russel C Ellwanger.

Discussions during the meeting revolved around potential collaborations between Tower Semiconductor and India in the chip manufacturing domain, indicating the company's keen interest in bolstering its presence in the Indian market.

If approved, Tower Semiconductor's proposal could mark a significant stride towards realising India's ambitions of becoming a global hub for chip manufacturing.

The Indian government’s $10 billion chip manufacturing scheme, which offers a 50 per cent capital expenditure subsidy to successful applicants, aims to incentivise and accelerate investments in this crucial sector.

Previously, Tower Semiconductor had expressed interest in setting up a $3 billion chip plant in Karnataka in partnership with the international consortium ISMC.

However, this plan was put on hold due to the impending merger between Tower Semiconductor and Intel.

Now, with renewed focus, the company seeks to solidify its footprint in India's burgeoning tech landscape.

In parallel with Tower Semiconductor's proposal, CG Power and Industrial Solutions announced a strategic partnership with a unit of Japanese chipmaker Renesas Electronics and Thailand's Stars Microelectronics.

The collaboration aims to establish a semiconductor facility in India at an investment of $222 million.

The proposed venture will focus on setting up an outsourced semiconductor assembly and testing (OSAT) facility, a crucial component in the chip manufacturing process.

In the joint venture, CG Power will hold the majority stake of 92.34 per cent.

Renesas Electronics America and Stars Microelectronics will hold stakes of 6.76 per cent and 0.9 per cent, respectively.

While India currently lacks indigenous chip manufacturing capabilities, initiatives like those proposed by Tower Semiconductor and CG Power signal a promising future for the country's tech industry.

With global players eyeing India as a lucrative destination for chip production, the nation is poised to emerge as a key player in the global semiconductor market.

Notably, other contenders like Foxconn and Vedanta are also vying to establish chip manufacturing facilities in India, highlighting the growing competition and potential for growth in this sector.

(With inputs from Reuters)