Micron To Invest $825 Million To Build Chip Assembly, Testing Facility In Gujarat
The deal strengthens technology ties between the U.S. and India amid American standoff with China on chip technology.
American chipmaker Micron Technology Inc. committed $825 million—about Rs 6,76,0 crore—to set up a semiconductor assembly and testing unit in Gujarat as India and the U.S. strengthen ties amid a standoff with China.
The "new facility will enable assembly and test manufacturing for both DRAM and NAND products and address demand from domestic and international markets", Micron said in a statement on Thursday, coinciding with Prime Minister Narendra Modi's U.S. state visit.
Construction for the first phase will begin in 2023, the U.S.-based chip manufacturer said. The first phase of the project, spanning over 500,000 cleanroom square feet, will become operational by late 2024, Micron said.
The company will receive 50% fiscal support from the Indian government, along with incentives representing 20% of the project cost from the Gujarat government.
Micron expects the second phase of the project, which would include the construction of a facility similar in scale to the first phase, to start in the second half of the decade.
The Indian government approved the facility before Prime Minister Narendra Modi left for the U.S. visit, Reuters reported.
“Micron’s investment to set up assembly and test manufacturing in India will fundamentally transform India’s semiconductor landscape and generate tens of thousands of high-tech and construction jobs,” said Union Electronics and IT Minister Ashwini Vaishnaw. He also expressed confidence in the country’s blossoming semiconductor ecosystem.
Commenting on the deal, the Micron President and CEO Sanjay Mehrotra said the company is excited about the steps India is taking to develop the local semiconductor ecosystem. “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," he said.
Micron's investment commitment came on the day General Electric and Hindustan Aeronautics Ltd. agreed to build fighter jet engines for India's air force and navy—a high point of Prime Minister Narendra Modi’s U.S. visit that signifies deepening military ties between the two countries.
The deals strengthen technology and defence ties between the U.S. and India amid an American standoff with China on chip technology. While India is seeking technology transfer to boost manufacturing, the U.S. seeks to diversify its supply chains.
China has banned the use of Micron chips, terming it critical infrastructure, increasing the risk for U.S. chipmakers.
Modi has met with American CEOs as he seeks to boost manufacturing in India when global companies are looking to diversify outside China.
