Tower Semiconductor plans to set up $8 bn worth semiconductor fab unit in India

Israel-based chipmaker Tower Semicondutor has submitted proposal for setting up a fabrication in plant worth $8 billion in India, an Indian Express report said. The firm is looking at manufacturing 65 and 40 nanometer chips in India to serve sectors like automotive and wearable electronics. To be sure, IT minister Rajeev Chandrasekhar had met Tower’s chief executive officer (CEO) Russel C Ellwanger in October and discussed potential partnership with India.

Tower Semiconductor would be reportedly leveraging the semiconductor production linked incentive (PLI), a $10 billion scheme. Under this scheme chip manufacturers get 50% expenditure subsidy from the government, along with additional benefits from the state where the plant may be located.

To be sure, this is not the first time Tower Semiconductor would be applying for the scheme. In May 2022, Karnataka government said that the international semiconductor consortium ISMC, a joint venture between Abu Dhabi-based Next Orbit Ventures and Tower Semiconductor will invest $3 billion in the state for setting chip-making plant. The deal fell through due to Tower’s impending merger with Intel. Later, the $5.4 billion acquisition deal failed as well due to regulatory reasons.

In June last year, Micron announced an investment of up to $825 million in a new chip assembly and test facility in Gujarat, reported by Reuters. With support from the Indian government and the state of Gujarat, the total investment in the facility is projected to be $2.75 billion, with 50% from the central government and 20% from Gujarat. The company spokespersons and the government have both said that the first chip manufactured at the plant will role out by the end of 2024 calender year.