MoS Rajeev Chandrasekhar meets Israel’s Tower Semiconductor CEO, discusses possible partnerships

Union Minister of State Rajeev Chandrasekhar is a busy man. Over the last ten days, Indian heads of some of the leading technology companies have met the minister. Right from Arundhati Bhattacharya, Chairperson and CEO, Salesforce India, to Som Satsangi, VP and Managing Director, Hewlett Packard Enterprise, India, to Vishal Dhupar, Managing Director, Asia South at NVIDIA. 

But there is one meeting that could be very important for India’s semiconductor dream—the meeting with Russell C. Ellwanger, CEO, Tower Semiconductors. Also present was Naor Gilon, Israel’s Ambassador to India. According to Chandrasekhar, the two discussed the India-Tower partnership in semiconductors.

Last year, International Semiconductor Consortium (ISMC), of which Tower Semiconductor is a part, had applied to be part of the government of India’s semiconductor scheme. However, at the time Intel proposed to acquire Tower Semiconductor. Due to this development, the decision on the consortium’s application was put on hold as the government wasn’t sure of Intel’s plan for letting Tower continue with the consortium post the acquisition was complete. Even last year, when Pat Gelsinger, CEO of Intel, had met Prime Minister Narendra Modi and MeitY Minister Ashwani Vaishnav, the company had told Business Today that there were no plans to set up foundry in Indian anytime soon. 

But with Intel - Tower Semiconductor deal off, the Ministry of Electronics and IT was once again in touch with Tower Semiconductors as per sources. And this meeting between Tower Semiconductor CEO and Minister Rajeev Chandrasekhar might result in some good news soon as according to the minister, after Micron, India has already received two fabs and three ATMP proposals, which are under evaluation.

But why Tower Semiconductor?

Tower Semiconductor is an Israel-based leading foundry of high value analog semiconductor solutions. It specialises in manufacturing analog integrated circuits for more than 300 customers worldwide in growing markets such as automotive, medical, industrial, consumer, aerospace, and defence, among others. It was ranked seventh in global foundry revenue with $356 million as per TrendForce Q1-Q3 data, and its annual revenue is likely to be well over $1 billion.

Tower is one of the foundries that has time and again offered to help India build its semiconductor ecosystem. Even in 2013-14, Tower Semiconductor was a part of consortium led by Jaypee Group where it would have been a technology partner along with IBM. The company once again offered to be a technology partner and this time with International Semiconductor Consortium (ISMC) which had submitted in February 2022 an application under India’s Rs 76,000 crore semiconductor incentive scheme for a 65nm technology node analog fab.

The way ahead:

According to industry experts, Tower Semiconductor is not in a financial position to set up a foundry on its own. But it can very well become a technology partner for one of the Indian conglomerates who are aiming to venture into the semiconductor space.

Another possibility is of an Indian conglomerate looking at acquiring Tower Semiconductor to expand into the chip manufacturing business. Major business houses in India - Tata Group, Hiranandani, and Vedanta are actively working in this space and interacting with global chip players. Even Reliance is believed to get into the chip race. Last year, the company was expected to acquire stake in each of the ISMC Analog fab applicant.

Whatever the development may be, with Tower Semiconductor’s support ( be it in form of technology transfer to an Indian player), India might finally be at the verge of approving application for its first fab.

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