Computer storage chip maker Micron will set up its semiconductor assembly and test plant in Gujarat entailing a total investment of USD 2.75 billion (around Rs 22,540 crore), the company said on Jun 22.

The total cost of the plant comprises USD 825 million (around Rs 6,760 crore) from Micron and the rest from the government in two phases, according to a company statement.

“We are excited about the steps India is taking to develop the local semiconductor ecosystem,” Micron President and CEO Sanjay Mehrotra said.

He said Micron’s new assembly and test location in India will enable the company to expand its global manufacturing base and better serve customers in India and around the world.

Micron’s plant has been approved under the government’s ‘Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme’.

Under the scheme, Micron will receive 50 per cent fiscal support for the total project cost from the Indian central government and incentives representing 20 per cent of the total project cost from the state of Gujarat.

“Phased construction of the new assembly and test facility in Gujarat is expected to begin in 2023. Phase 1, which will include 500,000 square feet of planned cleanroom space, will become operational in late 2024, ” Micron said in a statement.

Micron said that the plant will create up to 5,000 new direct jobs and 15,000 community jobs over the next several years.

“The combined investment by Micron and the two government entities over the course of both phases will be up to USD 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 statement said.

Micron will ramp capacity gradually over time in line with global demand trends. Micron said that it expects Phase 2 of the project, which would include the construction of a facility similar in scale to Phase 1, to start towards the second half of the decade.

“Micron’s new facility will enable assembly and test manufacturing for both DRAM and NAND products and address demand from domestic and international markets,” the statement said.

Union Minister for IT and Telecom Ashwini Vaishnaw said that 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.

“This investment will be a crucial building block in the country’s blossoming semiconductor ecosystem,” Vaishnaw said.

Minister of State for Electronics and IT Rajeev Chandrasekhar said that after the announcement of the Semiconductor vision by PM Narendra Modi and the planned investment of Rs 76,000 crore to catalyze and build India’s Semicon Ecosystem, much progress has been made in the last 18 months.

“This is a Big Big milestone in India’s roadmap and growth as a Semiconductor Nation,” Chandrasekhar said. Micron said that it selected the state of Gujarat due to its manufacturing infrastructure, conducive business environment and well-established talent pipeline in the SANAND Industrial Park (Gujarat Industrial Development Corporation GIDC).

“After more than a year of discussions with Indian government officials, spearheaded by the India Semiconductor Mission and the state of Gujarat, Micron is pleased to bring its industry-leading assembly and test capabilities to be a part of this transformation in India’s semiconductor industry,” Micron’s Senior Vice-President of Global Assembly and Test Operations Gursharan Singh said.

Micron will build and operate the assembly and test facility in accordance with the company’s sustainability goals and in line with local and global environmental commitments, the statement said.

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