Recently, India approved three proposals to set up wafer fabs and ATMP/OSAT facilities. However, India has yet to clear Tower Semiconductor's proposal, reportedly due to legal entanglements between the company and its joint venture partner.
Business Standard quoted lawyers from ISMC, a joint venture set up by Abu Dhabi-based Next Orbit Ventures and Israel-based Tower Semiconductor, asking the Indian government not to approve Tower Semiconductor's US$8 billion proposal to set up wafer fabs for analog ICs based on 40-65nm process nodes, as ISMC argued Tower Semiconductor's unilateral decision to halt their partnership was a breach of contract.
Tower Semiconductor and Next Orbit Ventured formed ISMC in February 2022 following India's introduction of an INR760 billion semiconductor and display fabs incentive scheme. The duo applied for the scheme and sought land in Karnataka for a 65nm analog IC wafer fab. Despite the funds from Next Orbit Ventures and technology from Tower Semiconductor, India did not clear ISMC's proposal, as Intel proposed to acquire Tower Semiconductor, and the Indian government would like to wait for the completion of the deal, which failed to materialize due to a delayed review by the Chinese government.
After Intel's acquisition of Tower Semiconductor fell apart, the latter decided to end its partnership with Next Orbit Ventures and sought a third-party partner introduced by ISMC. According to Business Standard, ISMC's lawyers said they strongly object to Tower's unilateral move and will pursue legal remedies in addition to asking the Indian government to block Tower Semiconductor's proposal.
The Indian government approved three projects: Tata-PSMC's wafer fab in Gujarat, Tata's ATMP facility in Assam, and an OSAT facility by CG Power-Renesas-Star Microelectronics in Gujarat. Earlier, Micron's US$2.75 billion memory ATMP facility was approved by India and received a subsidy of US$1.925 billion from India's central and state governments. The Ministry of Electronics and IT of India confirmed Tower was among the applicants in the latest round of applications, but Tower Semiconductor may have to address its disputes with ISMC before obtaining approval from India.
