According to reports, India's plans for chip production were dashed by a $3 billion semiconductor factory being built by the chip consortium ISMC, which included Israeli chipmaker Tower as a tech partner.

The second, $19.5 billion project is moving slowly as well since Vedanta, an Indian company, and Foxconn, a Taiwanese company, are unable to reach an agreement on a partner, European chipmaker STMicroelectronics.

Prime Minister Narendra Modi, who has made chips a high priority in his effort to usher in a new era in electronics manufacturing by wooing international corporations, has suffered a significant setback as a result of the difficulties the companies have encountered.

Three applications to establish facilities under a $10 billion incentive program were received last year from India, which anticipates that its semiconductor market will be worth $63 billion by 2026.

According to the reports, they came from the Vedanta-Foxconn Joint Venture, the international ISMC consortium, which counts Tower Semiconductor as a technology partner, and the Singapore-based IGSS Ventures.

Gujarat, the home state of Modi, will host the Vedanta JV plant, while ISMC and IGSS have pledged $3 billion for plants in two different southern states.

According to reports, ISMC's $3 billion plans for a chip manufacturing facility are presently on hold since Tower was unable to move forward with binding contracts while things were still being reviewed following its $5.4 billion acquisition by Intel last year. The transaction is subject to regulatory approval.

India is a late entry, and a few countries like Taiwan produce the majority of the world's chips. In September, the Vedanta-Foxconn JV revealed its plans to produce chips in Gujarat amid much excitement. The $19.5 billion initiative, according to Modi, is "an important step" toward achieving India's chip-making goals.

But as the JV looks for a tech partner, things haven't gone perfectly. STMicroelectronics had joined Vedanta-Foxconn for the purpose of licensing technology, but the Indian government has stated that it wants STMicro to have "more skin in the game"—perhaps a stake in the collaboration.

Depending on how its negotiations with Intel turn out, Tower may decide to rethink its involvement in the project.