New Delhi: The Adani Group has decided to take a break from talks with Israel’s Tower Semiconductor about a ₹83,000 crore (around $10 billion) chipmaking project in India. This project was part of Prime Minister Narendra Modi’s “Make in India” dream to make India a global hub for making semiconductors (computer chips). But due to some business and strategy issues, the deal has been paused for now.
Why Adani hit the brakes
After thinking it internally, Adani felt unsure about how much demand there really is for chips inside India. Unlike countries like China where there are many buyers, India’s market is still developing. Adani wasn’t sure if Indian companies would actually buy these locally made chips.
There was also a money issue. Adani wanted Tower to invest more money into the project. Tower, which is good at making analog chips used in things like cars, was mostly offering their tech knowledge and not enough funds. This didn’t sit well with Adani.
This project, which got the green light in Maharashtra in September 2024, was supposed to make 80,000 wafers every month and give jobs to around 5,000 people. But now, it’s on hold, just like what happened with Vedanta and Foxconn’s ₹1.6 lakh crore chip project that fell apart in 2023 because of delays in government help and rising costs.
There are still some plans going on, like:
- Tata Group’s ₹91,000 crore chip and testing center
- Micron’s ₹22,000 crore chip packaging plant in Gujarat
Even with all these efforts, India still doesn’t have a working semiconductor factory yet. Experts like UBS say that the U.S. and China alone uses over half of chips, while India only uses about 6.5%.
What this means for India
Adani’s step shows how companies are being careful before jumping into India’s new chipmaking scene. They want to make sure there are buyers in India itself, instead of depending on exports. This fits with Modi’s goal to cut down on imports and make India stronger in tech and electronics.
But there are still a lot of problems to solve, like high costs, not enough buyers, and waiting for better government support.
For now, the Adani-Tower chip project is on pause. It might restart later if conditions improve. But it also shows how hard it is to turn India into a player in the global chip industry.
