Tower Semiconductor Plant in India: Essential DLI Scheme Insights & Reliance’s Ambitious Plans
A $10 billion incentive offered by the Indian government for the semiconductor sector, attracted the Israel-based company Tower Semiconductor, which has proposed to build an $8 billion chip Fab plant in India.
Updated on 18 Mar 2024, 10:49 PM IST
Israel’s tower proposes $8 billion chip plant in india
Summary:
- An overview of Tower Semiconductor Limited
- Israeli based company Tower’s investment in India
- Is reliance group likely to acquire the Tower Semiconductor?
- DLI scheme by Indian government for creating semiconductor ecosystem in India
Tower Semiconductor Ltd.
Tower Semiconductor, also known as TowerJazz, was founded in Migdal Haemek, Israel (Headquarter) in 1993. The company’s inception involved to manufactured 150 mm wafer fabrication unit.
Source: tower semi. website
In 1994 it became a public company and now its shares are traded under the ticker TSEM on Tel Aviv Stock Exchange (TASE) and NASDAQ. The present CEO of the company is Russel Ellwanger and Chairman is Amir Elstein.
Market Capitalization: $4.63 Billion (check Realtime)
Share Price: 32.07 USD(NASDAQ) & 11,340 ILA(TASE) (check Realtime)
Revenue (Last Year): $1.5 Billion approx.
Manufacturing plants across the different countries:
- Fab 1 and Fab 2 : 150mm and 200mm wafer manufactures facility in Migdal Haemek, Israel respectively.
- Fab 3 and Fab 9 : 200mm wafer producing center located in Newport Beach, California and San Antonio, Texas in USA.
- By the TPSCo (51% owned by tower semiconductor) 200mm and 300mm wafer manufacturer center located in Hokuriku, Japan.
- With STMicroelectronics, Tower Semiconductor established a 300mm manufacturing plant in Italy.
Source: towersemi.com
The company has proposed to establish an $8 billion chip fabrication plant in India.
The Govt. of India announced a $10 billion scheme for the semiconductor manufacturing company in December 2021, saying 50% capital expenditure subsidy of total investment by a company. Additionally, some states of India may give extra subsidies to attract those companies.
Source: Twitter
It would be the first semiconductor company to establish a plant within the country with a proper fabrication facility pedigree, Tower is looking to 65nm and 40nm huge Indian chips market.
Last October, the Indian IT minister, Rajeev Chandrashekhar, met with Tower Semiconductor’s CEO, Russel Ellwanger, to discuss the India-Tower Partnerships deal in the semiconductor space. As a result, recently, Tower proposed an investment.
Reliance Industries has expressed interest in acquiring the Israeli company Tower Semiconductor. However, a spokesperson for Tower has denied any such acquisition, saying that “we are not in talks to acquire Tower Semiconductor. There is no truth in this.”
What is the DLI Scheme?
An another moves on made in India initiatives, Govt. of India has announced DLI (Design Linked Incentive) scheme of $10 Billion package in dec 2021 for create a Semiconductor chip design ecosystem in the country.
Design linked incentive scheme for startups and MSMEs by the govt. of India
C-DAC (Centre for Development of Advanced Computing), a scientific society operating under MeitY (Ministry of Electronics & IT), will serve as the nodal agency for implementation of the DLI scheme.
The scheme has 3 component –
- Chip design Infrastructure support: “C-DAC will setup the India Chip Centre to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores and support for MPW (Multi Project Wafer fabrication) & post-silicon validation) and facilitate its access to supported companies.”
- Product Design Linked Incentive: “A reimbursement of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application will be provided as fiscal support to the approved applicants.”
- Product Deployment Linked Incentive: “An incentive of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design are deployed in electronic products.”
“The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (i.e., more than 50% of the capital in it is beneficially owned by resident Indian citizens or Indian companies, which are ultimately owned and controlled by resident Indian citizens) for three years from claiming incentives under the scheme.” from pib press release.
An applicant must meet the Threshold and Ceiling Limits to be eligible for disbursement of incentives. The applicants can find the guidelines of the DLI Scheme and register themselves on the portal www.chips-dli.gov.in .
These government initiatives will boost the domestic semiconductor market, opening doors for startups in the industry. Learn more about semiconductor.
