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The Adani Group plans to build a semiconductor fabrication plant with an Israeli partner, in a bid to bolster India’s chipmaking capabilities as semiconductors become a key geopolitical battleground globally.
The conglomerate, led by billionaire Gautam Adani, and Israel’s Tower Semiconductor Ltd. will set up the chip manufacturing facility at Taloja on the outskirts of Mumbai at an investment of $10 billion, Devendra Fadnavis, deputy chief minister of the western Indian state of Maharashtra, said in a post on X Thursday that listed all the approved projects.
The unit is expected to have a production capacity of 40,000 wafers in the first phase, and 80,000 wafers in the second, Fadnavis said in the post, without sharing any timeline for the project.
The project, housed under the group’s flagship and incubator Adani Enterprises Ltd., will be built over three to five years, according to a person familiar with the planning, who asked not to be identified citing rules. The ports-to-power conglomerate will be largely fund the investment through its internal accruals and some debt, the person added.
The chips manufactured at the upcoming facility will be used in drones, cars, smartphones and other mobility solutions.
An Adani Group representative couldn’t immediately comment when reached by phone.
Adani, whose group is focusing efforts toward expansion after a scathing short-seller attack last year, is entering yet another sector which is a key focus area for Indian Prime Minister Narendra Modi’s administration.
Modi is looking to turn the world’s most-populated country into a technology superpower, lure more international chipmakers and cut reliance on expensive imports.
Semiconductors have grown into a crucial resource amid an escalating tech rivalry between the US and China, with many nations reviewing the risk of relying too much on imports and investing heavily in developing domestic capabilities. The Adani pact also gives Tower Semiconductor a foothold in a key emerging market, helping it move out of the shadow of its failed acquisition bid by Intel Corp.
Although Tower’s sales are a fraction of industry giants Intel and Taiwan Semiconductor Manufacturing Co., it makes components for large customers such as Broadcom Inc. and serves fast-growing sectors like electric vehicles.
Mature Chips
Adani is following the Tata Group into India’s nascent semiconductor industry. The Tata conglomerate has partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for its $11 billion chip fabrication plant in Dholera in the western state of Gujarat.
The new Tata facility will produce 50,000 of the so-called mature chips — using 40-nanometer or older technology — that are still widely used in consumer electronics, automobiles, defense systems and aircrafts.
The Indian government has received proposals worth $21 billion to beef up semiconductor capabilities across the country, with more than $15 billion investment in chipmaking plants already announced earlier this year.
India has also created a $10 billion fund to woo chipmakers to the country, which has already helped US memory maker Micron Technology Inc. establish a $2.75 billion assembly facility in Gujarat.
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