Tower's foundry plan may get up thumbs up from Cabinet today: Report

The proposal of Israeli semiconductor company Tower is likely to get approval from the Centre today, according to a report by The Economic Times (ET). This is likely to be India's first pure-play chip foundry.

Along with Tower, the Cabinet is also likely to approve the proposals of the Tata Group and the joint venture between HCL Group and Foxconn Group. Tata is likely to set up an assembly, testing, marking and packaging (ATMP) unit in Assam. Earlier, it had also announced its plans to set up a fab in Gujarat.

HCL and Foxconn announced an outsourced assembly and testing (OSAT) unit. The total investment of the JV is likely to be $100 million, with Foxconn investing up to $30 million.

On February 28, speaking at the "Viksit Bharat Ambassador Meet" in Pune, Union Minister Rajeev Chandrasekhar said that India has made significant strides in the semiconductor sector in the last two years during which the government received investment proposals of Rs 2.50 trillion from global chip makers.

"Today, investment proposals of more than Rs 2.50 trillion have been received by the Government of India from global semiconductor majors. India is fast becoming a semiconductor nation. Just two years ago, it was not even present in the semiconductor ecosystem of the world," he said.

Last year, Tower had resubmitted its proposal to set up a fabrication unit for 65 nm and 40 nm chips. Its earlier bid, which it made with ISMC Analog Fab Private, had failed to make any headwinds.

Foundries are an expensive affair with a long gestation period. Currently, the largest market share is held by Taiwan Semiconductor Manufacturing Co, Intel, Samsung, and United Microelectronics Corp. Notably, Tower is also a big player in foundries.

According to an earlier report by Indian Express, Tower's pnat may cost $8 billion. If it is approved, the Centre will pay $4 billion out of it in accordance with its chip manufacturing scheme.
Also, if Tower's proposal is accepted, it would be the first semiconductor company with a real fabrication pedigree to join the scheme.