Micron Breaks Ground on $2.7 Billion Semiconductor Facility in India

After much fanfare over plans to build semiconductor foundries in India, Micron has finally taken action. In the presence of Union IT Minister Ashwini Vaishnav, the US-based tech giant broke ground for its $2.7 billion chip assembly and test facility in India. To clarify, this is not a fabrication plant (fab) per se, but more of a packaging, testing, and assembly facility, which is a stepping stone towards a fab.

India will soon need 5 billion chips to meet its growing demand, and Micron moved quickly to make this happen. Sanjay Mehrotra, Micron's CEO and president, enabled the creation of the facility within three months of meeting Prime Minister Modi in the US. Micron has committed up to $825 million to build the facility, with support from the government.

The total investment is $2.7 billion, which means the government is contributing more than Micron, but this will be done in the form of subsidies. The facility is expected to create 5,000 direct jobs and 15,000 more jobs in the community in the next five years.

"We have made tremendous strides in the last 9-10 years," Rajeev Chandrasekhar, India's union minister of state for electronics and IT, told the gathering. "It is certainly a very important milestone, and I have absolutely no doubt that Micron's state-of-the-art plant will be a beacon to all investors, other manufacturers, and participants in the global semiconductor ecosystem."

The company's Assembly, Test, Marking, and Packaging (ATMP) facility is being set up on 93 acres of land in the Sanand GIDC-II industrial estate and is expected to be commissioned within 18 months. This facility will transform wafers into Ball Grid Array (BGA) packages for integrated circuits, memory modules, and solid-state drives.

This announcement comes after PM Modi promised 50% financial assistance to players who wish to set up semiconductor manufacturing facilities in India at the SemiconIndia 2023 conference in Gandhinagar. It also comes at a time when major semiconductor players like Intel are also doubling down their focus on Asia. However, Intel has no current plans to build a fab in India, something it reiterated at Innovation last week, though it is open to looking at the country in the future.

Foxconn, the contract manufacturer behind the iPhone, however, is working on its own facility even after its mooted JV with the Vedanta group didn’t go through. Both players are going to be following Micron’s lead.