Despite the Maharashtra government approving a multi-billion dollar semiconductor facility planned by Tower Semiconductor and Adani Group, key details of the partnership are still unclear according to senior government sources.
The proposed fab is aiming to avail incentives under India's $10 billion semiconductor incentive scheme, which provides up to half of capital expenditure as subsidies. However, Tower's application to the scheme does not explicitly mention partnering with Adani Group according to officials familiar with the matter.
One official stated that “In fact, we have asked Tower for clarifying some technical details in their proposal. No Indian partner has been specified, but they have mentioned that they will tie up with a domestic company.”
The sources indicated this lack of clarity points to the possibility that Maharashtra's announcementjumped the gun in approving the project. Another added “While states can fund plants independently, relying solely on their support for such advanced manufacturing is unlikely.”
Some see parallels to the scrapping of a previous Vedanta-Foxconn chip plant plan, which also saw shifting bases between states. However, a key difference is that Tower possesses actual chipmaking technology unlike the past venture.
Industry insiders say Tower will submit an updated application naming Adani, but the state's pre-emptive approval echoes attempts to influence upcoming elections. If subsidies are granted, the plant would still be years from production – assuming plans crystallize following the Centre's review.
For now, key questions remain unanswered about the contours of India's newest semiconductor partnership.
