The ongoing Intel-Tower takeover deal has stalled the plans of a $3 billion semiconductor facility in India. The facility was being built by chip consortium ISMC which added Israeli chipmaker Tower as a tech partner. According to a report by Reuters, India’s chip-making plans get delayed as the US chipmaking giant is currently taking over its Israeli counterpart.
Another $19.5 billion plan to manufacture semiconductors locally by a joint venture (JV) between India’s Vedanta and Taiwan’s Foxconn is also progressing slowly. As per the report, their talks to rope in European chipmaker STMicroelectronics as a partner are also deadlocked.
How this may affect India
Chipmaking has been a top priority for India and the challenges faced by the companies deal a major setback to those plans. The country is currently aiming to “usher in a new era in electronics manufacturing” by luring global companies.
The Indian semiconductor market is expected to be worth $63 billion by 2026. In 2022, the government received three applications to set up plants under a $10 billion incentive scheme. They were from the Vedanta-Foxconn JV; a global consortium ISMC which countsTower Semiconductor as a tech partner and from Singapore-based IGSS Ventures.
The Vedanta JV plant is to come up in Gujarat, while ISMC and IGSS each committed $3 billion for plants in Karnataka and Tamil Nadu, respectively.
Why Intel-Tower deal is affecting ISMC’s plans
The report claims that ISMC’s $3 billion chipmaking facility plans are currently on hold as Tower is unable to proceed to sign binding agreements. After Intel acquired the company for $5.4 billion in 2022, things are still under review as the deal is yet to receive regulatory approvals.
In an interview, MoS IT Rajeev Chandrasekhar also said ISMC “could not proceed” due to Intel acquiring Tower, and IGSS “wanted to re-submit (the application)” for incentives. The “two of them had to drop out,” he added, without elaborating.
Tower is expected to reevaluate its position in the venture depending on how the deal talks with Intel pan out. The report adds that none of the parties involved in these two deals have commented on the situation.
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