Tower proposes US$8 billion Indian wafer fab, says report

Business news | February 12, 2024

By Peter Clarke

Israeli foundry Tower Semiconductor has submitted a proposal to the Indian government to build a 65/40nm wafer fab in India at a cost of US$8 billion, according to The Indian Express.

The fab would be used to make ICs for both automotive and wearable electronics; two types of equipment now being assembled in India.

The development comes three months after a management team from Tower, led by CEO Russell Ellwanger, reportedly met India’s Minister of State for IT and Electronics, Rajeev Chandrasekhar (see Tower executives in talks to rekindle India fab plans).

Tower had previously active alongside an Abu Dhabi based venture capital firm in a US$3 billion plan to for India Semiconductor Manufacturing Co. Ltd. (see Tower JV signs agreement to build Indian wafer fab). The joint venture applied for a grant under the central Indian government’s $10 billion chip incentive scheme (see India details wafer fab subsidy scheme favoring 28nm) but venture capital firm subsequently pulled out of the venture.

Doubling down

Tower, now no longer encumbered by a planned acquisition by chip market giant Intel (see Intel drops Tower acquisition) has now apparently doubled-down on its Indian aspirations.

The company could receive as much as a 50 percent subsidy from the Indian federal government with additional support from the state where the fab is cited. Tower’s involvement with ISMC had already ear-marked a site in Mysuru, Karnataka.

Tower’s is the first wafer fab proposal from a company with experience and a substantial patent base in semiconductors to join India’s $10 billion semiconductor incentive scheme. The company does join memory-chip maker Micron Technology Inc. which is setting up a chip packaging plant in Sanand, Gujarat (see Micron breaks ground on $2.75 billion Indian chip packaging plant).

Several consortia around domestic conglomerates have made proposals to the Indian government about setting up chip manufacturing but many have lacked an experienced chip manufacturer in support.

It is now up to the Indian government to move quickly to secure Tower’s investment. The company has expressed an interest in coming to India since at least 2017.