Govt examining $11 billion semiconductor fab proposal by Israel’s Tower: Rajeev Chandrasekhar

On a day when the Union Cabinet approved three major semiconductor proposals, Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said that the government is also examining a $11 billion fab proposal by Israel’s Tower Semiconductor.

On February 29, the Union Cabinet approved three projects under the $10 billion capex linked incentive scheme of the government on February 29 worth Rs 1.26 lakh crore of investments.

“The one proposal that did not go to the Cabinet today was Tower. It (Tower’s) is a very important proposal that the government is examining today and hopes to successfully get approved. It is a slightly more complex proposal because they looked at a longer period of build out. It’s a much larger fab that they are building. And it is one of the few foundry-led investments that is coming into the country,” Chandrasekhar said in a press briefing.

“It is a complex proposal in the sense that they are a foundry company, and therefore it is not a classic JV (joint venture) kind of a model. So they want to do 100 per cent investment, with the option of an Indian partner later on,” he said.

“They want to do this as a significant build out an 80,000 wafers per month, fab. Their vision for this is a much larger fab than simply a 40,000 wafer, which therefore makes it something bigger than what a six year scheme can deal with. So it is a much more different. It’s a much larger project,” he said, while talking about the importance of the Tower Semiconductor proposal.

In total, Chandrasekhar said, the government has received proposals worth a total of $26 billion in the semiconductor sector. This includes, Chandraeskhar said, the three semiconductor proposals that was approved on February 29, Micron which was given green light last year, and those that are under consideration. The figure does not include proposals made in the display segment and those that have been rejected, he added.

The proposals which Union Cabinet approved on February 29 include, India’s first semiconductor fabrication plant or fab to be set up by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp. (PSMC) in Gujarat’s Dholera at a projected cost of Rs 91,000 crore.

Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit in Morigaon, Assam. Lastly, CG Power, in partnership with Renesas Electronics Corp., Japan and Stars Microelectronics, Thailand will set up a semiconductor assembly, testing, marking and packaging unit in Sanand, Gujarat.

Speaking on the importance of these investments that were approved, Chandrasekhar said, “If you look at the policy, we said, it (proposals) have to be a company who’s operating and managing a foundry currently or a company that has a licensing agreement from a foundry. Essentially, today what we are seeing is, all of these proposals are essentially foundry partners.”

“So Renaissance is a semiconductor company, Microns is a semiconductor company,  TSMC is a semiconductor company, Tower is a semiconductor company. And so none of these are really licensed third party plants. This is certainly consistent with what we thought in the early days,” Chandrasekhar said.

The Union minister estimates that India will become the largest semiconductor consumer after China and North America. “China’s consumption of semiconductor last year, I may be wrong, may not be precise, is about $600 billion. We estimated two years ago that we will be at about $110 billion (of semiconductors) by 2028,” the minister said.