Micron's $2.7 Billion Plan for Semiconductor Unit Gets Approval in India

Micron Technology's $2.7 billion plan for a new semiconductor testing and packaging unit in India has received approval from the country's cabinet, according to a senior government source who told Reuters. The move comes ahead of Prime Minister Narendra Modi's state visit to the United States, where he is set to meet with top American company executives and attend a state dinner at the White House.

The Indian government has agreed to provide production-linked incentives worth 110 billion rupees ($1.34 billion) for the construction of the plant in Gujarat. The size of the incentive package required cabinet approval, the source explained.

The approval of Micron's plan aligns with the White House's push for U.S. chip companies to invest in India. The Biden administration aims to reduce the risks associated with conducting business in China and enhance integration between the U.S. economy and that of India, the world's largest democracy.

During his visit to the U.S., Modi will engage with the CEOs of several prominent American companies, including FedEx and MasterCard. The Indian Prime Minister is also scheduled to attend a state dinner at the White House on June 22.

According to an industry source familiar with Micron's plans, the new Assembly Testing Marking and Packaging unit will be located in the city of Sanand. These units primarily focus on testing and packaging semiconductor chips rather than manufacturing them. Micron could utilize the plant to procure and package chips for clients, while other companies could send their chips for testing before shipping.

While the Micron deal contributes to India's semiconductor ambitions, the source noted that it does not represent a significant breakthrough. The industry source stressed that setting India as a semiconductor base would require additional efforts beyond the testing and packaging stage.

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