Maharashtra okays $10bn Adani-Israel chip-making unit, awaits ISM nod

MUMBAI: Maharashtra has approved the establishment of a semiconductor fabrication unit in Panvel, Mumbai, through a joint venture between the Adani Group and Israel-based Tower Semiconductor. The project, worth Rs83,947 crore ($10 billion), is set to boost India’s semiconductor manufacturing capabilities.

Deputy Chief Minister Devendra Fadnavis announced on X (formerly Twitter) that the unit will be developed in two phases, pending approval from the central government’s India Semiconductor Mission (ISM).

The first phase involves an investment of Rs58,763 crore, with a production capacity of 40,000 semiconductor wafers per month. The second phase, which will require an additional Rs25,184 crore, will double the plant’s output to 80,000 wafers per month.

Located in the Navi Mumbai suburbs of Raigad district, the plant will be housed within the Maharashtra Industrial Development Corporation’s (MIDC) Taloja Industrial Area, a hub for diverse industries. Once operational, the facility is expected to generate over 5,000 direct jobs.

Second chip maker

If approved by the ISM and the Ministry of Electronics and Information Technology, the Tower-Adani plant will become India’s second semiconductor fabrication facility. The first, Tata’s Dholera plant, was greenlit by the central government in February.

So far, neither the Adani Group nor Tower Semiconductor have issued official statements regarding the project. While it has received state-level approval, the joint application by the Adani Group and Tower Semiconductor is still under review by national authorities.

Should the project proceed, it would be the country’s sixth semiconductor plant, adding to the growing semiconductor ecosystem focused on manufacturing, testing, and packaging chips.

Earlier this week, the Union Cabinet approved a Rs 3,307 crore proposal for an outsourced assembly and testing (OSAT) unit by Kaynes Semicon in Sanand, Gujarat. This facility will have a daily capacity of 6.3 million chips.

Four units progressing

In June 2023, the Union Cabinet gave the nod to another semiconductor unit in Sanand, led by US-based memory chip giant Micron. Three more semiconductor projects received approval in February, including Tata Electronics’ semiconductor fab in Dholera, Gujarat, and a testing and assembly unit in Morigaon, Assam. Additionally, CG Power is setting up an OSAT unit in Sanand.

According to the central government, construction of all four semiconductor facilities is progressing swiftly, creating a strong semiconductor ecosystem around them. These projects will bring in nearly Rs 1.5 trillion in investment, with a combined daily chip production capacity of around 70 million.