US$10 Billion Indian Fab Gets State Approval for Tower

After years of setbacks and bureaucratic hurdles, Tower Semiconductor is once again making headlines with its ambitious plans to establish a wafer fab in India. The company's proposal, in collaboration with Adani Group, aims to set up a state-of-the-art manufacturing facility in Panvel, Maharashtra. However, the success of this venture hinges on securing central government approval to qualify for crucial subsidies under an Indian government scheme.

The significance of these subsidies cannot be overstated, as they could potentially cover more than 50 percent of the project's costs. Without this financial support, the entire endeavor could face significant delays or even come to a standstill. Tower Semiconductor, known for its expertise in analog, mixed-signal, and power foundry services, has been eyeing the Indian market since 2017.

Previous attempts, such as the proposed Indian Semiconductor Manufacturing Co. (ISMC) fab in Mysuru, faced challenges due to the absence of an Indian industrial partner in the consortium. Despite these setbacks, Tower Semiconductor remains determined to establish a strong presence in India's burgeoning semiconductor industry.

The Adani-Tower proposal envisions the construction of a wafer fab in two phases, each with a manufacturing capacity of 40,000 wafer starts per month. The estimated investment for the first phase stands at 587 billion rupees (approximately US$7 billion), with an additional 251 billion rupees (about US$3 billion) earmarked for the second phase. The total investment is projected to reach 839 billion rupees (around US$10 billion).

This latest development comes on the heels of Foxconn's withdrawal from a wafer fab joint venture with Vedanta in Gujarat. In contrast, in March 2024, Indian Prime Minister Narendra Modi participated in the foundation-laying ceremony for a joint venture wafer fab by Tata Electronics and Taiwan's PSMC in Dholera, Gujarat, as well as a chip packaging facility in Jagiroad, Assam.