Maharashtra Approves Adani-Tower Semiconductor’s $10 Bn Chip Manufacturing Plant

In another boost to India’s ambition to become a global hub for chip manufacturing, Maharashtra’s cabinet has approved Adani Group’s proposal to set up an INR 83,947 Cr ($10 Bn) semiconductor manufacturing plant with Israel’s Tower Semiconductor in the state.

The plant, which will come up at Panvel in Maharashtra, will be completed in phases. While the first phase has an initial allocation of INR 58,763 Cr, phase 2 has an outlay of INR 25,185 Cr,  Maharashtra’s deputy chief minister Devendra Fadnavis said in a post on X.

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. The plant is expected to create 5,000 jobs. 

Fadnavis said that the cabinet approved a total investment of over INR 1.20 Lakh Cr ( INR 1,20,220 Cr) in the state. 

Besides the semiconductor plant, the cabinet approved Skoda Volkswagen’s proposal for an investment of INR 15,000 Cr to set up EV and hybrid car manufacturing units and Toyota Kirloskar’s plan for INR 21,273 Cr investment to set up a hybrid and EV car manufacturing plant in the state. 

The development comes at a time when the Centre as well as state governments are focussing on promoting India as a global hub for semiconductor manufacturing by providing incentives to attract manufacturers. 

Earlier this week, the union cabinet approved the proposal of Kaynes Semicon to set up a semiconductor unit in Gujarat with an investment of INR 3,300 Cr.

Besides, Micron is setting up a $2.75 Bn plant in Gujarat and the Tata Group is setting up two new plants in Gujarat and Assam worth INR 91,000 Cr and INR 27,000 Cr, respectively. 

CG Power and Japan’s Renesas are also setting up a semiconductor plant in Gujarat’s Sanand at an estimated cost of INR 7,600 Cr.

The Centre was also said to be mulling to build a dedicated research and development unit under the proposed India Semiconductor Research Centre (ISRC). Last year, the government set aside INR 1K Cr to fund semiconductor design startups, along with a $10 Bn allocation for semiconductor manufacturing research and design.

The government’s focus has also resulted in the emergence of a number of semiconductor startups in the country. 

As per an Inc42 report, India’s semiconductor market will reach $150 Bn by 2030, up from $33 Bn in 2023, clocking an impressive CAGR of 24%.