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Micron set to break ground for $2.75 billion chip unit in Gujarat šŸ‡®šŸ‡³

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New Delhi|Bengaluru: Micron Technology is scheduled to break ground for its semiconductor testing and assembly plant in Gujaratā€™s Sanand on Saturday, barely three months after the US chipmaker announced its intent to set up the unit.

ā€œThe whole world is watching our semiconductor programme,ā€ IT minister Ashwini Vaishnaw told ET.

The facility, likely to be operational by late 2024, is coming up at a total proposed investment of $2.75 billion ā€” the largest so far under the India Semiconductor Mission (ISM).

Vaishnaw, Gujarat chief minister Bhupendra Patel and key executives from Micron are likely to be present at the event on Saturday, officials in the know of the preparations told ET.

Micron is the first proposal approved by the government under the mission. The deal was signed during Prime Minister Narendra Modiā€™s US visit in July.

ā€œItā€™s a very significant proposal, and within a very short time frame of just a few months ā€” land allocation, all the project agreements were signed and now the actual construction work will begin,ā€ said Vaishnaw. ā€œThe world will take notice of the speed at which the project has been executed and it will bring in a significant change in the way people will evaluate India in the future.ā€

The ecosystem partners necessary for the plant have identified locations for setting up their plants, and training programmes as well as hiring have been initiated, said the minister. ā€œWe can expect the first made-in-India chips to be rolled out by December 2024,ā€ the minister said.

Chip Manufacturing Ecosystem
The $10-billion ISM was announced in December 2021. The government has proposed a capital subsidy of 50%, along with state subsidies of 15-25%, to companies that show interest in manufacturing chips in the country and can demonstrate the required expertise.

The aim is to kickstart a chip manufacturing ecosystem, which is both an economic as well as a strategic need for the country. While large semiconductor manufacturers are still waiting in the wings and home-grown proposals from the likes of Vedanta have not fructified, the Micron investment under the governmentā€™s ATMP (assembly, testing, marking and packaging) programme is expected to eventually pull other companies to India.

Micron is also said to be evaluating setting up three to four domestic chip fabrication units, a government official told ET. ā€œWe have always believed that if ATMP comes, fab will also come,ā€ he said. ā€œThey (Micron) have started discussing a proposal for a fab. Three to four fab (units) will come together. (They) may not cost that much because a lot of activities will be common for them.ā€

According to people in the know, seven applications have been approved by Vaishnawā€™s ministry under the ATMP scheme, of the eight received.

Tata Semiconductor Assembly and Test has proposed to invest Rs 200 crore in Karnataka's Kolar district. The company is planning to manufacture semiconductor devices such as diodes, transistors, semiconductor-based transducers, photosensitive semiconductor devices and LEDs, sources in the state industry department told ET. The proposed facility at Perjenahalli is being set up close to the Tata Advanced Systems facility, they said.

Lam Research India has also signed a memorandum of understanding with the Karnataka government to invest Rs 235.91 crore in Bengaluru.

Project Details
For Micron, the new dynamic random access memory (DRAM) and NAND assembly and test facility ā€” the first in India ā€” will expand its global manufacturing base. It is aimed at addressing demand from domestic and international markets.

Phased construction of the new assembly and test facility in Gujarat is expected to begin this year. Phase 1 will include 500,000 square feet of cleanroom space. Micron will ramp up capacity gradually over time, in line with global demand trends, the company had said in June.

Micron expects phase 2, which would include construction of a facility similar in scale to phase 1, to start towards the second half of the decade.

The project is expected to create up to 5,000 direct Micron jobs and 15,000 community jobs over the next several years.

Under the governmentā€™s modified ATMP scheme, Micron will receive 50% fiscal support for the total project cost from the central government and incentives representing 20% of the total project cost from Gujarat.

Micron also intends to build several semiconductor assembly and packaging units in India, in addition to the fabrication unit, minister of state for electronics and IT Rajeev Chandrasekhar told a publication in an interview earlier this week.

 
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All critical components for assembly will be imported from China.

Micron's future looking bleek, look to unload the $hit bag.
 
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