According to a statement from Indian fund manager Next Orbit Ventures, the project will invest about $3 billion to build a 65-nanometer analog chip factory. Israel's Tower Semiconductor said it would provide technical support for the project. It is reported that the construction plan will create more than 1,500 direct jobs and 10,000 indirect jobs.

It is understood that ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. According to a statement from Indian fund manager Next Orbit Ventures, the project will invest about $3 billion to build a 65-nanometer analog chip factory. Tower Semiconductor said it will provide technical support for the project.

"Tower will be just an integrator and technology partner if this project can be implemented," Tower Semiconductor spokesman Shahar Orit told EETimes. Orit declined to provide details, saying Tower Semiconductor is expected to be acquired by Intel. Intel also declined to comment because the tower deal has not yet been formally approved.

Earlier, Intel announced the news of the acquisition of Tower Semiconductor, which has been approved by the shareholders' meeting.

As part of India's semiconductor plan, ISMC has requested 150 acres of land in the Kochanahalli industrial area and is currently awaiting approval from the Indian government. The government will provide up to half the cost of the project based on the fab's process technology.

India's goal is to build a semiconductor industry. Meanwhile, countries around the world, including the United States, Europe and Japan, are also planning to rebuild their declining chip industries. Chip shortages have cost companies from automakers to semiconductor equipment suppliers billions of dollars.

According to Bloomberg, India has been in talks with Intel, Global Foundries and TSMC to establish domestic operations to boost the country's high-tech manufacturing.

Prime Minister Narendra Modi's government announced a $10 billion incentive package in 2021 to entice flat-panel display and chip makers to set up factories in India, reports said. Replace China and become the world's electronics factory.

ISMC is not the only project producing chips in India. Indian mining group Vedanta has signed an agreement with Taiwan's Foxconn to start semiconductor production as early as 2025, with an investment of about $10 billion, according to media reports.

Companies have been evaluating India as a new production base as electronics manufacturing moves away from China. U.S. tech giant Apple has started producing the iPhone 13 in India in an effort to reduce its reliance on Chinese supply chains, according to Reuters. Apple contract manufacturer Foxconn is reportedly assembling the phones in Sriperumbudur, Tamil Nadu, India.

India has so far attracted investment from design-focused overseas and domestic chip companies. Continental Design India Ltd. is India's only chip maker, offering discrete components such as transistors, diodes and rectifiers.

To achieve its production dreams and global competitiveness, India needs to attract an ecosystem of semiconductor material and equipment suppliers, a goal that may take decades to achieve.