Reports today from India indicate that Tower Semiconductor Ltd.'s (Nasdaq: TSEM; TASE: TSEM) consortium has withdrawn a bid to build and operate a huge chip plant in India.
The consortium, led by Indian company Jaiprakash and also including IBM, was to have built the plant nearby another one under construction by Indian company Hindustan Semiconductor Manufacturing (HSMC), French-Italian company ST Microelectronics, and Malaysian company Silterra.
Prolonged indecision and foot-dragging by the Indian government probably caused Tower Semiconductor's consortium to decide against the plant, among other things because it was no longer commercially viable.
To illustrate the tortoise speed of the proceedings, it should be mentioned that the letters of intent were due to have been sent to the consortium by March 2012, and a binding agreement was slated for signing by the end of August in the same year. The agreements were never signed.
The consortium's investment in the plant was estimated at $4.1 billion, excluding Tower Semiconductor's cost. The Israeli company was to have contributed know-how to the venture, and to have provided advice in its construction. The abandonment of the project is expected to cost Tower Semiconductor, managed by CEO Russell Ellwanger, hundreds of millions of dollars in lost profits.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2016
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