The proposal of Israeli semiconductor company Tower has received Centre's approval. This is likely to be India's first pure-play chip foundry.

Union Minister Rajeev Chandrasekhar said that India has made significant strides in the semiconductor sector in the last two years during which the government received investment proposals of Rs 2.50 trillion from global chip makers.

"Today, investment proposals of more than Rs 2.50 trillion have been received by the Government of India from global semiconductor majors. India is fast becoming a semiconductor nation. Just two years ago, it was not even present in the semiconductor ecosystem of the world," he said.

Last year, Tower had resubmitted its proposal to set up a fabrication unit for 65 nm and 40 nm chips.

Its earlier bid, which it made with ISMC Analog Fab Private, had failed to make any headwinds.

Foundries are an expensive affair with a long gestation period. Currently, the largest market share is held by Taiwan Semiconductor Manufacturing Co, Intel, Samsung, and United Microelectronics Corp. Notably, Tower is also a big player in foundries.