The tl;dr version: this deal should free up government financing for a $3 billion manufacturing facility in Karnataka if Intel’s acquisition of the Israel partner, Tower Semiconductor, meets regulatory approval.
Next Orbit Ventures, a finance company that spearheaded the creation of the Indian Semiconductor Manufacturing Co. Ltd (ISMC), has agreed to sell its entire stake in the wafer fab consortium to B C Jindal Group, a steel pipe and plastic film manufacturer, according to a report in Business Standard.
The deal comes after the Indian Semiconductor Mission (ISM) indicated that a strategic investor would be necessary for the project to receive consideration for government subsidies. The joint venture aims to build a $3 billion, 65 nm analog wafer fab in Mysuru, Karnataka, and has applied for a grant under the central Indian government’s $10 billion chip incentive scheme. The scheme would provide up to 50% of the project’s cost for multiple wafer fabs and display manufacturing facilities.
ISMC, which has enlisted the support of Israeli specialist foundry Tower Semiconductor, has requested 150 acres of land in Mysuru’s Kochanahalli Industrial area for the project. The fab is expected to generate 1,500 direct jobs and 10,000 indirect jobs.
However, the project faces uncertainties due to the pending acquisition of Tower by Intel for $5.4 billion, which is subject to regulatory approval from various jurisdictions, including China. The outcome of the acquisition may have implications for Tower’s involvement in the Indian wafer fab project.
In the meantime, the involvement of B C Jindal Group could help ISMC meet the ISM’s requirements for a strategic investor, potentially increasing the project’s chances of receiving government support.
