Tower Semiconductor’s $11 Billion 65nm Fab Proposal: A Strategic Boost for India’s Semiconductor Manufacturing Ambitions

In a groundbreaking development, Israel-based Tower Semiconductor has proposed establishing a semiconductor fabrication plant in India. This could mark a significant milestone for India’s burgeoning semiconductor industry, which has long aspired to join the ranks of global manufacturing hubs. Despite India’s robust design capabilities, the country has struggled to attract major players to set up manufacturing facilities.

Past Opportunities: Intel’s Unfulfilled Plans

India’s semiconductor manufacturing aspirations are not new. Intel, a giant in the semiconductor industry, showed interest in India multiple times. The first instance dates back to 1969 when Intel co-founder Robert Noyce visited India. Another significant opportunity arose in 2005-06 when Intel proposed a multi-billion dollar investment. Unfortunately, these opportunities were not seized, leaving India on the periphery of the semiconductor manufacturing world.

Current Efforts: Lucrative Incentives Yet Lukewarm Interest

Today, India is offering some of the most attractive incentives globally, with up to 70% of project costs covered by central and state contributions. Despite these generous offers, major semiconductor players like Intel, Samsung, TSMC, and GlobalFoundries have shown little interest in setting up plants in India. This lack of enthusiasm makes Tower Semiconductor’s proposal particularly noteworthy.

Tower Semiconductor’s Proposal: Embracing 65nm Technology

Tower Semiconductor is considering India as a prime location for establishing a plant focused on 65nm technology. While this technology is not as advanced as the latest 3nm or 5nm nodes, it is well-suited for analog and mixed-signal semiconductor products. These chips are essential for a wide range of applications, including automotive, medical electronics, and telecommunications.

Expert Insights: Strategic Value of 65nm Technology

Industry experts emphasize the strategic importance of starting with 65nm technology. Satya Gupta, President of the VLSI Society, points out that analog chips do not require the dense transistor counts of digital chips, making 65nm a practical and efficient choice. Furthermore, 65nm technology involves the use of 193nm and 248nm DUV lithography tools, positioning India to transition more smoothly to advanced technologies in the future.

Danish Faruqui, CEO of Fab Economics, supports this view, highlighting that 65nm technology will enable India to meet current market demands and adapt to future technological shifts. This approach ensures a balance between immediate feasibility and long-term potential.

Approval Process: Awaiting Government Green Light

Tower Semiconductor submitted its proposal in 2022 and revised it in 2023. The company is now awaiting approval from the India Semiconductor Mission and the Ministry of Electronics and IT. There is some hesitation from the ministry, likely due to a global focus on more advanced nodes, but the strategic benefits of 65nm technology for India are clear.

Economic and Technological Impact

If approved, Tower Semiconductor’s $11 billion (Rs 91,000 crore) project will have far-reaching economic and technological impacts. It will not only create numerous jobs but also establish India as a key player in the global semiconductor market. The project’s success could attract further investments and foster the growth of a robust semiconductor ecosystem in India.

Future Prospects: Partnerships and Government Support

For Tower Semiconductor’s $8 billion proposal to succeed, securing an investment partner is crucial. Reports indicate that Tower Semiconductor has already identified a suitable partner. The Indian government, expected to return to power, needs to expedite the approval process and possibly increase the incentive ceiling to support such large-scale projects.

Conclusion:

Tower Semiconductor’s proposal offers a unique opportunity for India to make significant strides in semiconductor manufacturing. While the focus on 65nm technology may not seem as cutting-edge as more advanced nodes, it represents a strategic and practical starting point for India. With the right government support and strategic partnerships, this project could pave the way for India to become a major player in the global semiconductor industry, driving economic growth and technological innovation.

Via @ businesstoday