US firm Micron set to break ground for semiconductor unit in Gujarat; project okayed at record speed

In a significant development, Micron Technology will break ground for its semiconductor testing and assembly plant in Sanand, Gujarat, this Saturday, just three months after announcing its intention to establish the facility. The project, coming up with a proposed investment of $2.75 billion, marks the largest investment under the India Semiconductor Mission (ISM), according to an ET report. While Micron will contribute $825 million, subsidies will cover the remainder. The plant is projected to become operational by late 2024.
“The whole world is watching our semiconductor programme,” Union Minister Ashwini Vaishnaw was quoted as saying. This is the first proposal approved by the government under the ISM. The deal was signed during Prime Minister Narendra Modi‘s visit to the United States in July.
Vaishnaw lauded the project’s rapid pace, anticipating that it would transform perceptions of India on the global stage. “It’s a very significant proposal, and within a very short time frame of just a few months — land allocation, all the project agreements were signed and now the actual construction work will begin,” he said.
The plant’s ecosystem partners have already identified locations for their facilities and initiated training and hiring processes. The minister stated that the first made-in-India chips are expected to roll out by December 2024.
The $10-billion ISM, launched in December 2021, offers a 50% capital subsidy, along with state subsidies ranging from 15% to 25%, to chip manufacturing companies displaying the requisite expertise. This initiative aims to stimulate the chip manufacturing ecosystem, fulfilling both economic and strategic needs.
While large semiconductor manufacturers are still contemplating entry, Micron’s investment in assembly, testing, marking, and packaging (ATMP) is expected to attract other companies to India. Homegrown proposals like that of Vedanta have not fructified. Micron is even considering establishing three to four domestic chip fabrication units, a government official told ET.
Under the ATMP scheme, seven applications have been approved out of eight received by Vaishnaw’s ministry, people with knowledge of the matter said. Additionally, Tata Semiconductor Assembly and Test plans to invest Rs 200 crore in Karnataka’s Kolar district, focusing on manufacturing various semiconductor devices such as diodes, photosensitive semiconductor devices and LEDs, semiconductor-based transducers, transistors etc, sources in the state department were quoted as saying.
Meanwhile, Lam Research India has inked an MoU with the Karnataka government for a Rs 235.91 crore investment in Bengaluru.
Micron’s dynamic random access memory (DRAM) and NAND assembly and test facility, a first in India, will address both domestic and international market demand. Construction will commence this year, with Phase 1 featuring 500,000 square feet of cleanroom space. Micron plans to expand capacity gradually in line with global demand trends. It anticipates commencing phase 2, which involves the construction of a facility of comparable size to phase 1, during the latter part of the decade.
The project is expected to generate up to 5,000 direct Micron jobs and 15,000 community jobs in the coming years. Under the modified ATMP scheme, Micron will receive fiscal support from the central government amounting to 50% of the total project cost and incentives representing 20% of cost from Gujarat.
Additionally, Micron aims to establish multiple semiconductor assembly and packaging units in India, complementing the fabrication unit, according to Minister of State for Electronics and IT Rajeev Chandrasekhar.