The deal, which marked the Adani Group’s foray into the semiconductor industry, is likely to be a major setback for Prime Minister Narendra Modi’s ‘Make in India’ dream of promoting semiconductor production in India
Gautam Adani-led Adani Group has halted talks with Israel’s Tower Semiconductor. The deal worth $10 billion has been put on hold following an internal evaluation by the power-to-port conglomerate, as it didn’t make strategic and commercial sense to them, Reuters reported.
“It was more of a strategic decision. Adani evaluated it and decided, let’s wait,” Reuters reported, citing sources. The power-to-port conglomerate was not satisfied with the financial investment the Israel-based company was proposing to make. The company was to provide technological support in the partnership, but the Adani group reportedly wanted them to make a financial investment.
Additionally, the billionaire Gautam Adani-led group believed that the deal required reconsideration to ensure that chips manufactured are used in India, as the semiconductor market in the country is still in its infancy.
In September last year, the western Maharashtra state had announced approval for Adani Group and Tower to set up a plant to manufacture 80,000 wafers per month to boost chipmaking in India. Their collaboration for production was set to generate around 5,000 jobs.
The deal, which marked the Adani Group’s foray into the semiconductor industry, is likely to be a major setback for Prime Minister Narendra Modi’s ‘Make in India’ dream of promoting semiconductor production in India.
India’s semiconductor market is projected to grow from $52 billion in 2024 to $103.4 billion by 2030, according to the India Electronics and Semiconductor Association’s report (IESA) viewed by the Financial Express. The report highlighted the growth is powered by demand from major sectors including mobile handsets, information technology (IT), telecommunications, consumer electronics, automotive, aerospace and defence.
But this isn’t the only deal that has fell apart and delivered a blow to India’s emerging semiconductor industry. In July 2023, a similar deal worth $19.5 billion in investment between India’s mining major Vedanta and Taiwan’s Foxconn failed due to issues with project costs and delayed incentive approvals.