Israel’s Tower Semiconductor joins forces with Adani for $10 billion India chip project
Israel’s Tower Semiconductor joins forces with Adani for $10 billion India chip project
India takes a major leap toward its semiconductor goals with a massive investment from Tower and Adani.
Israel's Tower Semiconductor and Adani Group will invest $10 billion for a semiconductor project in India's western state of Maharashtra, its chief minister said in a post on X on Thursday.
India has taken steps to encourage global companies to set up their manufacturing units in the country, with Prime Minister Narendra Modi aiming to make the country a chipmaker for the world despite initial setbacks.
Tower has been connected with setting up chip-making factories in India several times over recent years. Foxconn withdrew in July last year from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta, and plans by ISMC, a venture between Abu Dhabi-based Next Orbit Ventures and Tower Semiconductor, to invest $3 billion in India, have been stalled.
Still, India expects its semiconductor market to be worth $63 billion by 2026.
Semiconductor manufacturing marks the latest foray for billionaire Gautam Adani, whose conglomerate has businesses across ports, power utilities, transmission and coal trading.
The $10 billion semiconductor plant in Maharashtra will initially have a capacity of 40,000 wafers, the state's deputy chief minister Devendra Fadnavis said in a post on X.
Chief Minister Ehnath Shinde said in a social media post that projects worth 1.17 trillion rupees were approved on Thursday, which will create 29,000 jobs in the state.
Two new electric vehicle manufacturing units will also be set up in the state, with Skoda-Volkswagen investing 150 billion rupees for its plant to produce electric vehicles and hybrids.
Toyota-Kirloskar will dole out 212.73 billion-rupees to manufacture hybrid and electric vehicles at its plant in the state.
Adani group, Tower Semiconductor, Skoda-Volkswagen and Toyota-Kirloskar did not immediately respond to a request for comment from Reuters.
In February 2022, Intel announced its $5.4 billion purchase of Tower, intending to anchor its new chip manufacturing division with the esteemed Israeli company.
However, the deal encountered resistance from the Chinese regulator, who perceived it as a threat to local chip manufacturing plants, leading to its cancellation last August. Despite receiving $313 million in compensation from Intel, Tower has visibly stagnated during the interim period.
Post-deal cancellation, Tower expanded its production capacity through a "compensation deal" with Intel which will see it produce chips at its Albuquerque factory in the U.S. and receive incentives through the American CHIPS act.
