Tower Semiconductor submits $8B fab unit plan in India – reports

Israel-based Tower Semiconductor has submitted an $8 billion proposal to the Indian government to set up a chip manufacturing unit in the country, according to media reports. If the government accepts the proposal, this would be the country's first fab unit. Tower plans to manufacture 65nm and 40nm chips in the country, the reports say.

Tower Semiconductor was in the news recently for a possible acquisition by Reliance Industries, India's largest business house and parent company of the country's largest service provider, Reliance Jio. As a result, its backing would help Tower get a foothold in the country.  

Intel was earlier planning to acquire Tower Semiconductors for $5.4 billion but this deal had to be shelved. While the merger cleared the antitrust review in the US, it failed to secure the required approvals from the Chinese authorities.

The collapse of the deal between Intel and Tower Semiconductors also led to the termination of the $3 billion chip facility planned by ISMC in India. Tower was the tech partner in the ISMC consortium and was unable to sign the binding agreement while it awaited the regulatory approvals for the Intel deal.

The government has been trying to set up a chip manufacturing unit in the country for several years now. It offered $10 billion in incentives to enhance India's appeal to chipmaking companies. 

While India has yet to announce any fab unit in the country, it has managed to attract companies to set up assembly and testing units. For instance, Micron plans to invest $2.7 billion to set up a chip packaging unit in Gujarat. In addition, Foxconn also announced a joint venture with HCL Group to set up an outsourced assembly and testing unit in the country.