Tower Semiconductor's $8 Billion Proposal Marks a Milestone in India's Chip Manufacturing Ambitions

Explore the impact of Israel's Tower Semiconductor's $8 billion chip-making proposal in India, aligning with Prime Minister Narendra Modi's semiconductor agenda.

Gobind Arora
Published on: 12 Feb 2024 5:06 AM GMT
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Tower Semiconductor's $8 Billion Proposal Marks a Milestone in India's Chip Manufacturing Ambitions

Israel's Tower Semiconductor is eyeing a significant presence in India with an ambitious proposal to establish an $8 billion chip-making facility. The move aligns with Prime Minister Narendra Modi's semiconductor manufacturing agenda, backed by a $10 billion scheme introduced in December 2021. Explore the potential impact and significance of Tower Semiconductor's proposal for India's growing semiconductor ecosystem.

**Tower Semiconductor's $8 Billion Proposal: Driving India's Semiconductor Vision**

As India intensifies its efforts to establish a robust semiconductor ecosystem, Tower Semiconductor's proposal to build a state-of-the-art chip-making facility worth $8 billion has captured attention. The company is actively seeking government incentives to facilitate its plan, intending to focus on manufacturing 65 nanometre and 40 nanometre chips within India's borders.

**Government Support and Strategic Discussions**

Semiconductor manufacturing has become a crucial aspect of Prime Minister Narendra Modi's business agenda. To further this vision, the Indian government introduced a $10 billion scheme in December 2021, emphasizing the significance of achieving self-reliance in chip manufacturing. Minister of State for IT, Rajeev Chandrasekhar, engaged in strategic discussions with Tower Semiconductor CEO Russell C Ellwanger, exploring potential collaborations between India and Tower in the semiconductor domain.

**Intel-Tower Semiconductor Dynamics**

In 2022, the International Semiconductor Consortium (ISMC), featuring Tower Semiconductor, applied to be part of India's semiconductor scheme. However, Intel's proposed acquisition of Tower Semiconductor temporarily halted the decision on the consortium's application. Following the termination of the Intel-Tower Semiconductor deal, the Ministry of Electronics and IT resumed discussions with Tower Semiconductor, reigniting the possibility of its active participation in India's semiconductor initiatives.

**Why Tower Semiconductor?**

Tower Semiconductor, a prominent Israel-based foundry specializing in high-value analog semiconductor solutions, stands out as a key player in India's semiconductor aspirations. With a focus on manufacturing analog integrated circuits for diverse markets such as automotive, medical, industrial, consumer, aerospace, and defense, Tower Semiconductor is well-positioned to contribute significantly to India's semiconductor ecosystem.

**Continued Support and Historical Collaborations**

Tower Semiconductor's interest in India's semiconductor journey is not new. In the past, the company has actively expressed its willingness to assist India in building its semiconductor capabilities. In 2013-14, Tower Semiconductor was part of a consortium led by Jaypee Group, aiming to be a technology partner alongside IBM. The company has reiterated its commitment to India's semiconductor goals by offering to be a technology partner in collaboration with the International Semiconductor Consortium (ISMC).

**Micron Technology's Investment in India**

The semiconductor landscape in India is witnessing other key players' involvement as well. US chipmaker Micron Technology, in June last year, announced an $825 million investment to establish an assembly and test facility in Gujarat. Anticipated to become operational in late 2024, Micron aims to roll out its first chip in India by December 2024.

**The Road Ahead: A Boost for India's Semiconductor Ecosystem**

Tower Semiconductor's proposed $8 billion chip-making facility presents a significant opportunity for India's semiconductor industry. With growing support from global players and proactive government initiatives, India is steadily moving towards enhancing its semiconductor capabilities and establishing itself as a key player in the global chip manufacturing landscape.

Gobind Arora

Gobind Arora

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