The pending Intel-Tower acquisition deal has stalled plans of a $3 billion semiconductor factory in India. The facility was built by a chip consortium ISMC which has added Israeli chipmaker Tower as a technical partner. India’s chip-making plans are being delayed as the US chip giant is currently acquiring its Israeli counterpart, according to a Reuters report.
Another $19.5 billion plan to produce semiconductors locally through a joint venture (JV) between India’s Vedanta and Taiwan’s Foxconn is also progressing slowly. According to the report, their conversations talk to rope in the European chipmaker ST Microelectronics as a partner are also stuck.
How this can affect India
Making chips is a top priority for India and the challenges faced by the companies are a major setback to those plans. The country is currently trying to ” usher in a new era in electronics manufacturing ” by attracting international companies.
The Indian semiconductor market is expected to be worth $63 billion by 2026. In 2022, the government received three applications to set up factories under a $10 billion stimulus package. They were from the Vedanta-Foxconn JV; a global consortium ISMC that counts Tower Semiconductor as a technical partner and is based out of Singapore IGSS Enterprises.
The Vedanta JV plant will be located in Gujarat, while ISMC and IGSS have each pledged $3 billion for plants in Karnataka and Tamil Nadu respectively.
Why the Intel-Tower deal affects ISMC’s plans
The report claims that ISMC’s plans for a $3 billion chip manufacturing facility are currently on hold because Tower cannot continue to sign binding agreements. After Intel acquired the company for $5.4 billion in 2022, matters are still under review as the deal is subject to regulatory approval.
In an interview, MoS IT Rajeev Chandrasekhar also said that ISMC “couldn’t go further” because Intel acquired Tower, and that IGSS wanted to “resubmit (the application)” for incentives. The “two of them had to drop out,” he added, without elaborating.
Tower is expected to re-evaluate its position in the company depending on how the deal with Intel goes. The report adds that none of the parties involved in these two deals have commented on the situation.
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