Amid legal tensions, Israeli chipmaker Tower resubmits semicon proposal

Posted on by


Tower Semiconductors has reportedly resubmitted a proposal to establish a semiconductor fabrication unit in India for 65 nanometer (nm) and 40 nm chips. However, the move has triggered legal action from its former joint venture partner, Next Orbit Ventures, which is exploring options to sue Tower Semiconductors for submitting a new proposal with a different partner, according to a report by The Economic Times (ET).


As earlier reported by Business Standard, a management team from Tower, led by CEO Russell C Ellwanger, met with four to five Indian companies and Minister of State for IT and Electronics Rajeev Chandrasekhar in late October.


According to the ET report, Tower Semiconductors’ latest proposal may involve a partnership with the BC Jindal group, a major manufacturer of packaging and labelling products. The BC Jindal group has acknowledged working on a semiconductor proposal but refrained from providing additional details. This marks Tower Semiconductors’ second attempt to establish a semiconductor chip fabrication unit in India.


Tower Semiconductors’ initial effort to enter the Indian market involved a joint venture with the International Semiconductor Consortium (SIMC) Analog Fab Private. However, this venture faced challenges and did not progress despite a proposed investment of $3 billion.


The current proposal has strained relations with Next Orbit Ventures, which claims it was excluded from the new partnership despite a signed non-disclosure agreement (NDA) and a prior agreement with Tower.


Legal action by Next Orbit Ventures


Next Orbit Ventures is seeking legal counsel and considering legal action against Tower Semiconductors. The dispute revolves around an alleged understanding that if Tower set up a fab in India, Next Orbit Ventures would be a partner. The legal discussions involve potential injunctions on the fresh partnership and claims for damages based on the efforts Next Orbit Ventures invested in advancing Tower’s fab ambitions in India.


Legal discussions between the involved parties are ongoing. However, none of the parties involved have made any official comments on the situation.

 

First Published: Dec 25 2023 | 11:57 AM IST