Micron to invest $825M in Gujarat to set up chip assembly

Micron Technology, the American chip maker, has confirmed its investment of up to $825 million in a new chip assembly and test facility in Gujarat, India. This marks Micron's first factory in the country and demonstrates the growing interest of global companies in India as an attractive investment destination for semiconductors.

With support from the Central government and the state of Gujarat, the total investment in the factory is estimated to be $2.75 billion, according to Micron. The project received approval from the Cabinet ahead of Prime Minister Modi's visit to the United States, highlighting its significance.

India has been actively positioning itself as an attractive destination for electronics and semiconductors, implementing a Production-Linked Incentive (PLI) scheme for the sector. Micron Technology CEO Sanjay Mehrotra expressed optimism about the company's prospects in India, emphasizing its global leadership in memory and storage technology.

The construction of the facility in Gujarat is scheduled to commence in 2023, with the first phase expected to be operational by late 2024, Micron stated.

Another phase of the project is projected to begin in the second half of the decade. Collectively, these two phases are anticipated to create around 5,000 new direct job opportunities at Micron.

Setting up semiconductor units, also known as fabs, is a complex and expensive undertaking. Fabs require advanced technology, involve high risks, and have long gestation and payback periods. Despite the challenges, the Indian semiconductor market is flourishing, valued at $27.2 billion in 2021, and is projected to grow at a healthy compound annual growth rate (CAGR) of nearly 19%, reaching $64 billion by 2026. However, India has yet to manufacture chips domestically.

Micron Technology's investment in the new chip assembly and test facility in Gujarat signifies the company's confidence in India's potential as an emerging market for semiconductors. The establishment of this factory not only showcases India's attractiveness as an investment destination but also holds the promise of creating thousands of job opportunities in the semiconductor industry.

It remains to be seen how Micron's foray into India will contribute to the country's goal of becoming self-reliant in chip manufacturing. As India continues its efforts to develop its semiconductor ecosystem, collaborations with global players like Micron will play a crucial role in realizing this vision.

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