Adani Group Pauses Talks On $10 Bn Chip Deal With Tower Semiconductor

Gautam Adani-led ports-to-power conglomerate Adani Group has reportedly put a pause on its $10 Bn chip venture discussions with Israel’s Tower Semiconductor.

Citing sources close to the matter, a Reuters report said that the move followed an internal evaluation which concluded that the project currently lacks strategic and commercial viability.

In September last year, to set up an INR 83,947 Cr ($10 Bn) semiconductor manufacturing plant with Israel’s Tower Semiconductor, backing India’s ambition to become a global hub for chip manufacturing, which was expected to create 5K jobs.

The semiconductor plant will have a production capacity of 40,000 wafers per month in phase 1, which will increase to 80,000 wafers per month after phase 2.

While the Adani Group had initially stated the project was under consideration, the latest assessment led to the company stepping back, citing demand-related concerns, especially within India.

“It was more of a strategic decision. Adani evaluated it and decided, let’s wait,” a source was quoted as saying, while it is particular that there is a possibility this would resume at a later timeline.

Another source said that the group is not satisfied with the amount of financial contribution Tower was willing to make into the partnership, without disclosing details.

Tower was to provide technological expertise in the deal, but “Adani wanted Tower to have more skin in the game” in financial terms, the report added.

(The story will be updated soon.)

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