Adani reportedly pauses talks with Israel's Tower for $10 billion India chip project

Gautam Adani's group has put a pause on discussions with Israel's Tower Semiconductor for a $10 billion chip project as it did not make strategic and commercial sense for the group. The Maharashtra government in September announced its approval for Adani and Tower to set up a facility which would produce 80,000 wafers per month and create 5,000 jobs, helping Prime Minister Narendra Modi's ambition of making India a chipmaking hub.

Adani Group had previously said the project was being evaluated. However, a source with direct knowledge of the matter said that talks with Tower have now been put on hold after the Indian conglomerate's internal evaluation found there was still uncertainty about how much demand, especially in India, the business can generate.  said the first.

"It was more of a strategic decision. Adani evaluated it and decided, let's wait," said the source, adding there is a possibility talks can resume at a later date.

A second source briefed on the matter said Adani Group was not satisfied with the amount of financial contribution Tower was willing to make into the partnership, without disclosing details.

Tower was to provide technological expertise in the deal, but "Adani wanted Tower to have more skin in the game" in financial terms, the person added.

The Modi government has made chipmaking a top priority for India's economic strategy in pursuit of gaining a greater geopolitical edge in electronics manufacturing.