Micron to set up Rs 22,540 crore semiconductor facility in Gujarat

US chipmaker Micron Technology on Thursday pledged to invest USD 825 million to set up a new semiconductor assembly and test facility in Gujarat, in a big boost to the Union Government’s semiconductor mission aimed at attracting investments in the sector.

The DRAM and NAND assembly and test facility – the first in India – will expand Micron’s global manufacturing base to meet future demand as the company plans to begin phased construction of the new facility by the end of this year and make it operational in late 2024.

The new investment will create up to 5,000 new direct jobs and 15,000 community jobs over the next several years, the company said, adding that it expects the phase-II of the project to start towards the second half of the decade.

Since the investment is being made under the Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme, Micron will receive 50 per cent fiscal support for the total project cost from the Union Government and incentives representing 20 percent of the total project cost from Gujarat.

“The combined investment by Micron and the two government entities over the course of both phases will be up to $2.75 billion. Government support will help fund the project and facilitate access to essential semiconductor infrastructure and resources to drive innovation and enhance local talent development,” the company said in a statement.

The announcement came hours after Micron Technology’s CEO Sanjay Mehrotra met Modi at the upscale Willard Intercontinental Hotel in Washington D.C. and said he was looking for “greater opportunities” in India.

“Our new assembly and test location in India will enable Micron to expand our global manufacturing base and better serve our customers in India and around the world,” Mehrotra was quoted as saying in the statement.

Micron’s new facility will focus on transforming wafers into ball grid array (BGA) integrated circuit packages, memory modules and solid-state drives.

Micron becomes the second company to choose Gujarat for setting up a semiconductor assembly facility after Vedanta-Foxconn joint venture.

The Union Government has been reaching out to semiconductor firms across the globe since 2021 by launching a Rs 76,000-crore production-linked incentive scheme (PLI) after the global supply chain encountered several issues, including the Covid-19 lockdown in China.

Several state governments have in the past one year invited Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung to invest in the semiconductor sector in India. Home-grown Tata Electronics Private Limited (OSAT division) has also announced that it will venture into semiconductor manufacturing, for which four states, including Tamil Nadu, Karnataka, and Telangana, are in competition.

(The reporter is in the US for a study tour on Countering Disinformation sponsored by the US Department of State)