Israel is planning a major investment in India’s semiconductor sector in the near future. Here’s what we know so far.
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After suffering through an extended component shortage both during and after the global pandemic, organizations and governments around the world are devising new ways to boost this industry segment and ensure continuity of supply. The CHIPS and Science Act, for example, aims to strengthen the U.S. semiconductor industry, reduce reliance on foreign suppliers and enhance national security.
India is also putting a lot of effort into enhancing its own semiconductor manufacturing sector, and is currently seeking foreign investments for the development and design of fabs; assembly, testing, marking and packaging (ATMP); and other products. Known as the “India Semiconductor Mission,” the effort is already gaining traction and attracting proposals from global sources, according to India Briefing, which is tracking business activity in this area.
Israel Throws its Hat into the Ring
Israel is the latest country to reveal its interest in helping India boost production of semiconductors and related products. India Briefing says a recently proposed $10 billion (839.47 billion rupees) joint semiconductor fab proposal by Israel’s Tower Semiconductor and India’s Adani Group is currently under review as part of the India Semiconductor Mission (ISM).
Reuters says the two groups plan to invest the money in a semiconductor project in India’s western state of Maharashtra. It says India expects its total semiconductor market to be worth $63 billion by 2026, and that the $10 billion semiconductor plant in Maharashtra will initially have a capacity of 40,000 wafers.
The Tower Semiconductor investment will be used by an Israeli company to establish a facility in Panvel, in the Raigad district, Al-Monitor reports. “India is currently trying to position itself as one of the biggest microchip producers by encouraging foreign companies to set up manufacturing facilities there,” the publication adds.
This new project is part of a larger effort to attract more foreign investment in India’s semiconductor industry. In February, AI-Monitor says the county’s prime minister approved $15.2 billion worth of investments for domestic semiconductor fabrication plants, including a proposal by the local conglomerate Tata Group to build the country’s first major chip-making facility.
And on a recent visit to Singapore, the prime minister signed a deal to strengthen microchip production in India in light of the southeast Asian nation’s decades of experience in the sector, AI-Monitor reports. Singapore accounts for around 10% of global chipmaking output and some 20% of semiconductor manufacturing equipment production.
Reducing Reliance on Imports
Housed under the group’s flagship and incubator Adani Enterprises Ltd., the new project will be built over three to five years, Yahoo! Finance reports. The chips manufactured at the upcoming facility will be used in drones, cars, smartphones and other mobility solutions. It says
Adani Group is entering a sector that 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,” says Yahoo! Finance, noting that semiconductors have grown into a crucial resource amid an escalating tech rivalry between the U.S. and China, with many nations reviewing the risk of relying too much on imports and investing heavily in developing domestic capabilities.
