26.06.2023

Micron Technology Inc. has revealed that it will receive a significant subsidy worth seventy percent of the $2.75bn cost of building and equipping a chip packaging plant in Gujurat,. Under the Indian government’s Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme, Micron will receive fifty percent fiscal support for the total project cost from the Indian central government and incentives representing twenty percent of the total project cost from the state of Gujarat. The facility will be the first DRAM and NAND assembly and test facility in India and Micron expects to create 5,000 direct jobs and 15,000 indirect jobs over several years. The plant is set to become operational by late 2024, with Micron gradually ramping capacity. The construction of the plant is part of an ongoing effort to strengthen India's semiconductor ecosystem.

The announcement of the unit was expected, however, the level of subsidy is unusually high. India has an incentive scheme that has failed so far to attract any industry leaders to commit to Indian inward investment. However, securing investment from a major chip company such as Micron could be key to getting other companies to site wafer fabs in India. The construction of the facility is expected to begin in 2023, with phase one covering 500,000 square feet of cleanroom space, aims to become operational by the end of 2024. Sanjay Mehrotra, CEO of Micron, met Prime Minister Narendra Modi in Washington DC shortly after PM Modi had been received by President Biden, and stated that “I am very impressed with the vision that he has for India and the advances that India is making. We discussed a wide range of topics and we really look forward to greater opportunities in India”.

Micron’s inward investment in China has had a troubled history. However, only recently, Micron stated its plans to expand its packaging facility in Xi’an, China, and it plans to spend around $600m there.