Micron signed MoU with Gujarat for India's first private semiconductor manufacturing facility in 3 decades

Days after Narendra Modi's visit to the US, Micron signed an MoU with the government of India's western state Gujarat to set up an ATMP plant, India's first semiconductor manufacturing facility in more than 30 years.

Mint and Reuters reported that Micron and Gujarat government signed an MoU for setting up a US$2.75 billion ATMP facility in Sanand, Ahmedabad. India's central and state governments will provide subsidies of 50% and 20% of the project costs, with the remaining US$8.25 million to be invested by Micron.

According to Micron's statement earlier, the construction of the plant will come in phases, with phase 1, encompassing a planned cleanroom of 500,000 square feet, to become operational by late 2024, and phase 2 of the project will include the construction of a facility in a similar scale to phase 1 to commence operation in the second half of the decade.

Mint quoted Ashwini Vaishnaw, India's union minister of electronics and IT, saying that it typically takes 36-48 months for a chip facility to begin manufacturing, but in India, the first chips are likely to be made in 18 months. According to the report, Micron's facility is expected to bring 5,000 direct jobs and 15,000 indirect jobs.

The ATMP facility for NAND and DRAM is expected to be India's first semiconductor manufacturing facility in over 30 years. In the 1980s, Semiconductor Complex Limited made chips in India before it was burned down by a fire breakout in 1989. Later, it became a research institute under the Ministry of Electronics and IT of India and could produce chips with 180nm technology nodes.

In mid-2022, Vedanta-Foxconn Semiconductors also signed an MoU with the Gujarat government to set up a wafer fab. NDTV quoted Vaishnaw saying that the reason Micron chose the state to set up the ATMP plant was because of the availability of talent, ultra-pure water, and ultra-stable power.

According to the Gujarat Electronics Policy 2022-2028, the state provides up to 20% of the capital expenditure for companies setting up ESDM (Electronics System Design & Manufacturing) units with a ceiling of INR2 billion, besides other subsidies such as stamp duty, interest assistance, logistics subsidy, and incentive on power tariff and electricity duty.

Gujarat also launched Gujarat Semiconductor Policy 2022-2027, where the state offers fiscal and non-fiscal support, such as 40% of the capital expenditure assistance and one-time reimbursement of 100% of stamp duty and registration fee.

Source: Department of Commerce of India, June 2023