Maharashtra government has accorded approval for a $10 billion joint venture semiconductor fabrication unit, to be set up by Adani Group and Israel’s Tower Semiconductor, inviting a legal challenge by ASMC Analog, over breach of contract by the Israeli firm.
The Adani-Tower joint venture has proposed to build the semiconductor manufacturing facility in the Taloja industrial area of the Maharashtra Industrial Development Corporation (MIDC), adjacent to Navi Mumbai.
The plant will have an initial capacity to produce 40,000 wafers per month and will produce both analog and mixed-signal chips. It will double capacity to 80,000 wafers per month in phase 2.
The new joint venture proposal, according to ISMC, is in breach of an earlier agreement the Israeli chip maker had signed with it.
ISMC says it had, on 31 December 2020, signed an agreement with Tower Semiconductor for setting up a joint venture for manufacturing a 300-millimetre analogue/mix fab project in Karnataka. The partners had also applied for incentives under the government’s Semiconductor Mission.
In fact, it was one of the early proposals under the government’s incentive scheme. However, the ISMC-Tower proposal could not be taken forward due to the proposed merger of Tower with Intel.
Intel had to abandon the merger plan because of regulatory hurdles, especially from Chinese authorities.
Meanwhile, the law firm representing ISMC has taken up the issue of breach of agreement by Tower with the India Semiconductor Mission (ISM), seeking rejection of the proposal.