Why is the Adani Group aiming for a second semiconductor manufacturing hub in Maharashtra?

Chipping In

By Richa Sharma

In a major boost to India’s semiconductor mission, the Adani Group, led by Chairman Gautam Adani, has joined forces with Israel’s Tower Semiconductor to set up a semiconductor manufacturing facility in Maharashtra with an investment of `83,947 crore.

Once approved by the India Semiconductor Mission (ISM) and the Ministry of Electronics and Information Technology, it will become the second such manufacturing facility in the country after Tata’s. All other projects in the sector approved so far are associated with assembly and packaging.

Tower Semiconductor specialises in analogue and mixed-signal semiconductor products and chips on a global scale. “The partnership (with Adani) looks good, and they will be focussing more on analogue mixing of chips, which is also a positive sign. Tower already has experience in India, as it provided technology to Semi-Conductor Laboratory, Mohali, a decade ago,” says Satya Gupta, President of industry body VLSI Society of India.

Per Gupta, the Adani Group, from both a technical and business perspective, possesses all the necessary capabilities to execute such a large project, as it requires substantial financial resources and long-term sustainability. However, it remains to be seen how fast the central government can approve the project so that it can seek incentives under the ISM. “It might take some time,” says Gupta, as the initially allocated corpus for the $10-billion incentive has already been exhausted. “They (the government) have to approve this new proposal. They need another $5 billion, as [Adani’s is] a $10-billion proposal, and then the government of India has to approve 50% as an incentive,” Gupta explains.

Maharashtra’s cabinet has already approved the joint venture to establish a semiconductor manufacturing facility in Taloja, Panvel. Devendra Fadnavis, Deputy Chief Minister of Maharashtra, announced the project, stating that the plant will initially have a production capacity of 40,000 wafers in the first phase, increasing to 80,000 wafers in the second phase, and will create 5,000 jobs.

Experts say having an analogue mixing chip manufacturing unit in India is beneficial for the country, as it does not require advanced technology but is used in several sectors. 

@richajourno