Micron to invest $2.75 billion in setting up semiconductor testing facility in Gujarat’s Sanand

Of this, Micron will invest $825 million while the rest will be a combination of incentives from the central and state governments, the company said.

With the planned investment, Micron will become the first of the large global players to set up a semiconductor testing facility in India.

The construction of the proposed Gujarat facility is expected to start this year and will include 500,000 sq ft of planned cleanroom space.

Micron plans to start operations from the unit in 2024, the company said in a statement, adding that it will ramp up the capacity over time.

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

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The project is being set up under the India Semiconductor Mission’s Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme. ATMP/OSAT units are an important link in the semiconductor manufacturing chain as they perform the crucial tasks of testing and packing silicon chips.

The proposed unit is expected to create 5,000 direct and nearly 15,000 indirect community jobs over the next several years.

“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 company said.

While the incentives from the central government will be 50% of the total project cost, the state government is expected to give additional incentives, which will be about 20% of the total cost, the company said.

ET had reported on June 17 that the government was set to approve a roughly $3-billion project of Micron to set up an OSAT unit with at least four assembly lines.

“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,” electronics and information technology minister Ashwini Vaishnaw said.

Micron’s facility in Gujarat will focus on “transforming wafers into ball grid array (BGA) integrated circuit packages, memory modules and solid-state drives” and will enable assembly and test manufacturing for both DRAM and NAND products.

“We are excited about the steps India is taking to develop the local semiconductor ecosystem,” Micron president and chief executive officer Sanjay Mehrotra said. “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.”

Micron, which was established in Idaho in 1978, has three offices in India — one in Bengaluru and two in Hyderabad. The company’s plan to expand in India is part of its strategy to meet the expected increase in long-term demand for memory and storage semiconductor chips, as well as augment Micron’s global assembly and test network, it said.

“This is a big milestone in India’s roadmap and growth as a semiconductor nation. This is just the beginning as there is more to come as India rapidly grows as a significant and trusted partner to global electronics and semiconductor value and supply chains,” the minister of state for electronics and information technology, Rajeev Chandrasekhar, said.

In December 2021, the government had announced an incentive scheme of Rs 76,000 crore to set up a semiconductor manufacturing and fabrication ecosystem in India. While initially the scheme proposed to give incentives depending on the technology, it was revised in October last year to give a flat 50% incentive to all players, irrespective of the technology and the nature of the facility.