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India's largest business group, Reliance Industries, is exploring acquisition of Israel-based Tower Semiconductors for foray into chipmaking.
India's largest business house, Reliance Industries, is in talks to acquire Israel-based Tower Semiconductors, according to media reports.
The news comes shortly after Intel abandoned its plans to buy the Israeli company. An acquisition by Reliance, if it goes through, will provide an opportunity for the group to venture into the semiconductor segment and may accelerate India's ambitions to set up a fab unit in the country.
Reliance comes with very deep pockets, which could revitalize India's floundering ambitions to set up its own fab plant. What further helps Reliance is that the group is known to be close to the current government, making it easier for them to work together closely. In addition, having a chipmaking unit will help Reliance protect its telecom and devices segment from chip shortages.
The COVID-19 pandemic revealed the extremely fragile nature of the semiconductor supply chain, causing a massive shortage of chips. That pushed several countries, including India, to try and develop their own chipmaking capabilities.
Tower Semiconductor manufactures advanced analog integrated circuits and has more than 300 customers from different industries, including aerospace, defense and automotive. However, it has been reported the ongoing conflict between Israel and Hamas is likely to delay talks.
Fab unit plans
Tata Group is another Indian conglomerate that is interested in making a foray into chipmaking. Tata Projects is building Micron Technology's semiconductor assembly and test plant in the state of Gujarat. According to media reports, Tata Group was also looking for land to set up a chipmaking unit in Tamil Nadu earlier this year.
The Indian Government planned to offer $10 billion in incentives to encourage fab companies to set up a fab unit in the country. It also set up India Semiconductor Mission (ISM) to help companies set up a manufacturing unit to address the growing domestic demand for chips.
Applicants, however, struggled to find technology partners to establish the country's first semiconductor unit. Vedanta and Foxconn initially formed a $19.5 billion joint venture but later decided to pursue their chipmaking plans independently. Singapore-based IGSS Ventures and Tower Semiconductors, along with Taiwan-based ISMC, were the other applicants to the scheme.
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