Israeli chip maker Tower Semiconductor (TASE: TSEM; Nasdaq: TSEM) plans to build a fab in India at a cost of about $8 billion, according to a report in "The Indian Express". The report says that if the Indian government approves Tower’s proposal, the company will join the government’s $10 billion chip manufacturing scheme, and will be eligible for a 50% subsidy of the capital cost of building the fab, so that the cost to the company will be $4 billion. The state in which the chip foundry is located may provide additional benefits.
"The Indian Express" reports that Tower Semiconductor had earlier submitted a proposal for building a $3 billion foundry in the state of Karnataka in southern India in collaboration with ISMC (The International Soil Modelling Consortium), but that this plan was shelved because of Tower’s impending merger with Intel, which was eventually cancelled because of regulatory difficulties in China.
The newspaper also reports that India’s Minister of State for Electronics and IT Rajeev Chandrasekhar met Tower Semiconductor CEO Russel Ellwanger last October to discuss the company’s partnership with India in chip manufacturing.
Sources in the industry say that Tower's India plan is an initial proposal the main aim of which is to enable the company to embark on such a project in the future if it can, but that at the moment the project is not reckoned to be feasible.
Tower is not alone. In June last year it was reported that US memory chip company Micron Technology had confirmed that it intended to invest up to $825 million to set up a chip packaging plant in Gujarat. According to Reuters, the total investment in the plant will be $2.75 billion, with 50% coming from the Indian government and 20% from the state of Gujarat.
Tower Semiconductor said in response: "If and when there is something concrete or material, the company will report it."
Published by Globes, Israel business news - en.globes.co.il - on February 12, 2024.
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