Adani Pulls Plug on $10 Bn Chip Bet—India’s Fab Future in Flux

Adani Group has paused its $10 billion semiconductor joint venture with Israel's Tower Semiconductor after an internal evaluation deemed the project strategically and commercially unviable. The facility, planned for Maharashtra, was expected to produce 80,000 wafers per month and create 5,000 jobs, aligning with India's ambition to become a global chipmaking hub.

Key reasons for the pause:

• Uncertain domestic demand for semiconductor production in India.
• Financial disagreements, with Adani expecting a stronger investment commitment from Tower Semiconductor.
• India's semiconductor landscape, which still lacks an operational fabrication plant despite government incentives.

This setback follows the collapse of Vedanta-Foxconn's $19.5 billion chip venture in 2023 due to cost concerns and delayed approvals. Meanwhile, Tata Group's $11 billion chip facility and Micron's $2.7 billion chip packaging plant continue to move forward.

India's semiconductor industry has undergone a significant transformation, shifting from a design-focused ecosystem to an ambitious manufacturing push.

Tata Group's ₹91,000 crore fab project in Gujarat marks India's first commercial semiconductor fabrication facility. Micron's $2.7 billion chip packaging plant and Vedanta-Foxconn's now-canceled $19.5 billion fab venture highlight India's growing ambitions and challenges.

However, despite all these developments, India still imports 95% of its chips, lacking an operational fabrication plant. The Dholera Special Investment Region is being developed as a semiconductor hub, but execution remains slow.