Gujarat signs MoU with US chip maker Micron for $2.75 bn semiconductor plant

Gandhinagar: The Gujarat government on Wednesday signed an MoU with the US-based computer storage chip maker Micron for setting up a USD 2.75 billion semiconductor assembly and test facility at Sanand in Ahmedabad district.

It will be the first semiconductor manufacturing facility in India, said Union Electronics and Information Technology Minister Ashwini Vaishnaw, adding that the first chips will be manufactured within 18 months.

The Memorandum of Understanding was signed here by Micron's senior vice president Gurusharan Singh and the Gujarat government's secretary, Science and Technology Vijay Nehra in the presence of Chief Minister Bhupendra Patel and Vaishnaw.

For the last many decades India is dependent on imports of semiconductor chips, and the demand for them will increase as the country's manufacturing sector grows, Vaishnaw said on this occasion. "There were attempts to bring semiconductor manufacturing facility to India for long. Now it will be a reality," he said. Semiconductors are a basic requirement for the country's electronics industry, the Union minister noted.

The deal was finalised during Prime Minister Narendra Modi's visit to the United States on June 22, and within six days the Gujarat Government allocated land and signed the MoU, he said. "Generally, it takes 36 to 48 months for a semiconductor chips facility to start manufacturing. In India, the first chips are likely to be manufactured in 18 months," Vaishnaw said.

More companies are in the pipeline to set up semiconductor plants in India, the minister informed. Micron senior vice president Singh said they decided to set up the plant in Gujarat due to its industry-friendly policies. At Sanand plant, "(silicon) wafers will be converted into semiconductor chips", he said, adding that it will create 5,000 direct jobs and 15,000 indirect jobs. The plant will entail a total investment of USD 2.75 billion (around Rs 22,540 crore), Singh said.

The plant has been approved under the Union government's `Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme'. Under the scheme, Micron will receive 50 per cent fiscal support for the total project cost from the Indian government and incentives representing 20 per cent of the total project cost from the Gujarat government.

Phase 1 of the plant, which will include 5,00,000 square feet of planned cleanroom space, will start to become operational in late 2024, Micron had said in a statement earlier. "Micron's new facility will enable assembly and test manufacturing for both DRAM and NAND products and address demand from domestic and international markets," the statement had added.