Tower Semiconductor, headquartered in Israel, has presented its proposal to establish a chip fabrication facility in India valued at approximately $8 billion, according to sources familiar with the matter. If accepted by the government, this move would mark the first instance of a semiconductor company with significant fabrication expertise participating in India’s $10 billion chip manufacturing initiative, potentially providing a substantial boost to New Delhi’s ambitions in the semiconductor industry. The government is currently evaluating the proposal and aims to approve it prior to the implementation of the model code of conduct preceding this year’s general elections.
Should Tower’s proposal garner government approval, it would mark the inaugural participation of a semiconductor company with substantial fabrication expertise in India’s $10 billion chip manufacturing initiative, offering a significant boost to New Delhi’s aspirations in the chipmaking realm. Under the scheme, successful applicants are promised a 50 percent capital expenditure subsidy, implying that if Tower’s plant carries an $8 billion price tag, the Central government would allocate $4 billion from its budget. Additionally, any state where the chip foundry could potentially be located may offer supplementary incentives to the company.
Tower’s objective is to manufacture 65-nanometer and 40-nanometer chips in India, with potential applications spanning across diverse sectors including automotive and wearable electronics. Last October, Minister of State for Electronics and IT Rajeev Chandrasekhar engaged in discussions with Tower’s CEO Russel C. Ellwanger regarding the company’s collaboration with India in the chip domain.
Tower Semiconductor declined to provide a comment in response to a request. Previously, Tower had submitted an application to the scheme for establishing a $3 billion plant in Karnataka, in collaboration with the international consortium ISMC. However, the plan encountered obstacles due to Tower’s impending merger with Intel at the time. In August of last year, Intel scrapped its intention to acquire Tower Semiconductor for $5.4 billion due to regulatory challenges.
