Adani Group has paused talks with Israel’s Tower Semiconductor for a proposed $10 Bn chip manufacturing project in India, citing commercial and strategic concerns. The planned facility, approved in Maharashtra, was expected to produce 80,000 wafers monthly and create 5,000 jobs to support India’s semiconductor ambitions.

Sources revealed that Adani’s internal evaluation flagged uncertainty over local demand for semiconductors, prompting the decision to delay. While Tower was set to offer technological expertise, Adani reportedly sought a higher financial commitment, which did not materialise.

This development marks another setback for India’s chipmaking goals under the "Make in India" initiative. The country still lacks an operational semiconductor plant. A $19.5 Bn venture between Vedanta and Foxconn collapsed in 2023 over cost and regulatory concerns. Meanwhile, active projects include an $11 Bn fabrication and testing plant by Tata Group, and a $2.7 Bn packaging unit by Micron.

With the United States and China together commanding 54 per cent of global chip demand, and India holding just 6.5 per cent, market constraints continue to challenge local manufacturing initiatives.

Source:Reuters