Micron Technology Inc. revealed its intention to build a $2.75-billion semiconductor testing and assembly facility in India, making it the first of its kind in the country. This decision comes as a result of the government’s $10-billion incentive plan aimed at promoting chip manufacturing. The facility will be established in two phases, with the initial phase encompassing the construction of a 500,000 sq ft assembly facility in Sanand, Gujarat, scheduled to begin later this year. The second phase is set to be rolled out in the latter half of the decade. Micron will directly invest $825 million, while the central and state governments will contribute the remaining $2.75 billion. By availing government incentives, Micron will receive financial support equivalent to 50% of its total project cost from the Centre, and an additional 20% from the Gujarat state government. Once completed, the facility is expected to generate up to 5,000 new jobs directly, and an additional 15,000 indirect jobs within the community over the next several years.
Applied Materials, a competing US semiconductor manufacturer, also revealed plans to invest $400 million in building an engineering center in Bengaluru. This investment, which will span four years, aims to develop and commercialize semiconductor manufacturing equipment. The new facility will not only train future semiconductor industry talent but also foster collaboration between engineers, academia, and suppliers.
Rajeev Chandrasekhar, Union Minister of State for Electronics and IT, deemed this development a significant milestone in India’s journey towards becoming a semiconductor nation. He highlighted the rapid progress made in a short period since Prime Minister Narendra Modi announced the semiconductor vision and the planned investment of INR 76,000 crore to catalyze the growth of India’s semiconductor ecosystem. He believes that this is just the beginning and that India will thrive as a trusted partner in the global electronics and semiconductor value and supply chains. Ashwini Vaishnaw, Railways, IT and Telecom Minister, also expressed confidence that Micron’s investment will revolutionize India’s semiconductor landscape and create thousands of high-tech and construction jobs.
Micron is currently the world’s second-largest DRAM maker, with a 28.1% market share as of December last year. In addition, it holds the fourth position in the global Nand flash manufacturing market, with a market share of 12.3%, as reported by Statista in the September quarter. Samsung remains the leading manufacturer in both the DRAM and Nand flash modules segments.
Various industry leaders and stakeholders have praised the establishment of semiconductor facilities in India, with many stating that it will contribute to the development of a domestic component supply chain for the semiconductor industry. Vivek Tyagi, an advisor to the board of the industry body India Electronics and Semiconductor Association, believes that the facility will boost India’s overall supply chain for chipmakers and attract Micron’s global supply vendors to the country in the long run. Sanjay Gupta, chairperson of IESA, expressed that these announcements highlight India’s ability to attract high-value investments, foster technological advancements, and strengthen its position as a hub for semiconductor manufacturing.
This announcement comes after Vedanta and Taiwanese contract manufacturer Foxconn’s joint venture, which had been expected to be the first entity to set up its facility under the semiconductor PLI scheme. However, Micron secured the first approval, beating other applicants to the incentive plan. Micron’s new facility is a significant step forward for India’s chip manufacturing sector, as it accelerates the government’s efforts to build a robust semiconductor ecosystem in the country.
