2024-10-16 05:30:15 :
The Ahmedabad-based conglomerate is in advanced stages of discussions with two large Israeli niche technology companies over the plan to form separate joint ventures, two people said on condition of anonymity.
“The total investment is likely to be US$7-8 billion, with initial capital requirements of US$3 billion,” the first person said. “The funds will be used to establish manufacturing facilities and obtain technology transfer from two Israeli companies.”
The first semiconductor factory could be completed by 2027, two people said. While multiple locations in different states are being explored, one location in Maharashtra is close to being finalized, the first person said.
On September 6, Maharashtra Deputy Chief Minister Devendra Fadnavis mentioned in his speech that Adani Group planned to invest $83,947 crore (approximately $10 billion) to set up a chip manufacturing plant in Maharashtra. However, he did not disclose further details. The two men did not comment on Fadnavis’ statement.
An email sent to Adani Group remained unanswered as of press time.
India’s Semiconductor Dream
Adani’s move comes against the backdrop of the federal government’s ambition to indigenize electronic and new-age technologies used in key strategic areas. The Center said it wants to curb dependence on imports, especially from China, of high-end electronic chips and circuits that are critical in manufacturing and managing certain defense equipment, automobiles and modern vehicles, communication equipment and aircraft.
To this end, in order to capitalize on the boom in electronics consumption in India, the Center in December 2021 announced a $10 billion incentive package for the India Semiconductor Mission to drive investment in chip manufacturing and related ecosystems in the country.
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The investments come at a time when semiconductor consumption in India is exploding. A report by the Indian Electronics and Semiconductor Association shows that the country’s semiconductor consumption will increase from US$22 billion in 2019 to US$110 billion by 2030, making India account for about 10% of global semiconductor demand.
What will Adani do?
According to the plan, Adani Group will produce integrated circuits (ICs) and provide OSAT services, the first person said. OSAT stands for Outsourced Semiconductor Assembly and Test (OSAT), and the company provides IC packaging and test services to semiconductor manufacturers for a variety of applications.
Adani’s chips are designed to manage unmanned aerial vehicles (UAVs) and drones used in warfare, complex computing, cars, aircraft and various artificial intelligence devices.
According to the first person, the chips and circuits produced by Adani Group will both meet the needs of Indian companies and be exported. “There is demand from the United States,” the first person said, adding that because semiconductor circuits are often designed for specific needs, they involve sharing and processing certain consumer data. This type of consumer data currently flows mainly to Chinese technology companies.
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“Not only does our country want to reduce the flow of consumer data to China, but the United States and some other countries also want to achieve some degree of rebalancing in terms of shared consumer information. This is even more important because semiconductor chips are used in important sectors.” First. people say.
Additionally, the pair said the group may have an advantage in terms of production costs because it has its own generation and transmission capabilities, transportation and logistics networks.
Since the group itself owns seven major airports and is actively involved in the manufacture of defense vehicles and equipment, part of the end-user base for the group’s chips can be found within the group, responsible for underlying operating revenue.
However, the two did not disclose any details about revenue targets, expected return on investment or the capacity of the proposed factory.
action pickup
As India’s semiconductor journey accelerates, Adani Group will compete with several other companies at various stages of investment, but its main competitor will be the Tata Group.
Several Indian companies, including Tata Electronics and CG Power and Industrial Solutions Ltd, have formulated semiconductor joint venture plans with overseas partners. Micron Technology and Cairns Technology also made investment commitments.
Tata Electronics has started setting up a semiconductor manufacturing plant in Dolela, Gujarat in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Company (PSMC). Tata expects the first phase of its project to cost up to $Group’s first semiconductor factory to be commissioned by 2026, according to Rs 91,000-crore report Mint. The Tata plant plans to produce chips for power management circuits, display drivers, microcontrollers and high-performance computing logic.
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Although on a smaller scale, CG has begun building an OSAT factory in Gujarat in partnership with Renesas Electronics and Stars MicroElectronics (Thailand) Public Co. Ltd, Hindu Businessline reported.
At the same time, according to the Economic Times, US-based Micron Technology is also building an ATMP factory in Gujarat and plans to bring the first batch of chips packaged in its factory to the market in 2025. ATMP stands for Assembly, Testing, Marking and Packaging. It takes packaged products from OSAT factories and places them on printed circuit boards.
Israel connection
Adani’s semiconductor joint venture could strengthen ties with Israel. The group established its first joint venture with Israeli weapons manufacturing company Elbit Systems as early as 2018 to produce Hermes 900 drones mainly for use by the Israeli military.
Last year, the Israeli government sold 70% of the Port of Haifa, a major trading center on the Mediterranean coast, to the Adani Group and the remaining 30% to the Gadot Group, an Israeli private chemicals and logistics company. The valuation is US$1.18 billion.
Earlier in October 2022, Adani Defense and Aerospace and Israel Arms Industries launched India’s first artificial intelligence shooting system at an expo in Gandhinagar, Gujarat.
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