Adani Pauses $10 Billion Semiconductor Plant Project with Tower Semiconductor in India

India’s ambitious semiconductor manufacturing vision has encountered another major setback as the Adani Group has reportedly paused its $10 billion partnership with Israel-based Tower Semiconductor. The project, which aimed to establish a large-scale wafer fabrication facility in Panvel, Maharashtra, was expected to produce 80,000 wafers per month, focusing on the analog and mixed-signal chip market.

According to insider sources, the Adani Group decided to halt the project following an internal review of market demand and commercial viability. A key sticking point in the discussions was Adani’s expectation for greater financial participation from Tower Semiconductor, beyond the scope of technology transfer. While negotiations have been suspended, sources indicate that the dialogue between the two companies may resume at a later stage.

The decision marks another blow to India's semiconductor ambitions, especially after Zoho Corporation also withdrew its $700 million compound semiconductor fab project in Karnataka.

India launched a $10 billion semiconductor incentive scheme in late 2021 to attract global players, but the plan has faced numerous hurdles, including strict technology benchmarks and complex subsidy requirements. Although the government eased some subsidy conditions in early 2023, tangible progress on the ground has remained limited.

The suspended Adani-Tower project underscores the persistent structural and investment challenges facing India’s semiconductor ecosystem. The country continues to struggle with turning policy aspirations into on-ground manufacturing capabilities, despite strong global interest in semiconductor supply chain diversification.