Tower Semiconductor Proposes $8 Billion Chipmaking Plant in India

In a significant development for India’s semiconductor industry, Israeli chipmaker Tower Semiconductor has put forth a proposal to establish an $8 billion chip manufacturing plant in the country. The Indian Express reported this groundbreaking initiative, highlighting Tower Semiconductor’s intent to manufacture 65 nanometre and 40 nanometre chips within India. These chips are anticipated to find applications across various sectors, including automotive and wearable electronics.

The proposal, if accepted by the government, holds immense promise for India’s chip manufacturing aspirations. This move aligns with India’s $10 billion chip manufacturing scheme, which offers a 50 percent capital expenditure subsidy to successful applicants. Tower Semiconductor’s interest in setting up operations in India underscores the country’s growing prominence as a preferred destination for semiconductor manufacturing.

This development stems from a series of discussions initiated earlier, including a meeting between Minister of State for Electronics and IT, Rajeev Chandrasekhar, and Tower Semiconductor’s CEO, Russel C Ellwanger, back in October 2023. The fruitful dialogue paved the way for exploring collaboration opportunities in the chip manufacturing space, further solidifying the bond between Israel and India in the technology sector.

Tower Semiconductor’s previous endeavor to establish a $3 billion chipmaking plant in Karnataka, in partnership with the International Consortium ISMC, faced a temporary setback due to the company’s merger proceedings with Intel. However, with renewed vigor and a clear vision, Tower Semiconductor is now poised to make a significant impact on India’s semiconductor landscape.

In parallel, CG Power and Industrial Solutions announced a strategic partnership with a unit of Japanese chipmaker Renesas Electronics and Thailand’s Stars Microelectronics to set up a semiconductor facility in India. This $222 million venture entails the formation of a joint venture (JV) focused on establishing an outsourced semiconductor assembly and testing (OSAT) facility. Such collaborations underscore the collective effort towards enhancing India’s semiconductor ecosystem and fostering technological self-reliance.

An OSAT plant plays a pivotal role in the semiconductor supply chain by assembling and testing foundry-made silicon wafers, ultimately transforming them into finished semiconductor chips. This venture represents a crucial step towards bolstering India’s capabilities in semiconductor manufacturing and meeting the burgeoning demand for electronic components in domestic and global markets.

As India continues to position itself as a key player in the semiconductor industry, partnerships with global leaders like Tower Semiconductor, Renesas Electronics, and Stars Microelectronics will undoubtedly accelerate the country’s journey towards technological excellence and economic growth. The proposed chipmaking plant by Tower Semiconductor signals a new era of collaboration and innovation, propelling India towards becoming a global hub for semiconductor manufacturing.


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