US chipmaker Micron broke ground for its USD 2.75-billion (INR22,854 crore) chip packaging plant at Sanand in Gujarat on Saturday, marking a significant milestone in India’s goal to emerge as a hub for global semiconductor manufacturing.
The Idaho-headquartered company, which had announced its intent to invest in India during Prime Minister Narendra Modi’s trip to the US in June, received a fast-track approval for its proposal, becoming the first overseas company to commence construction under the ambitious USD 10-billion India Semiconductor Mission.
“The entire global semiconductor industry is feeling very confident about India now,” union IT and electronics minister Ashwini Vaishnaw told ET at the ground-breaking ceremony. “We should see at least two large proposals in the coming few months, which will establish India as a (manufacturing) leader in some of the niche semiconductor products,” he said.
Tata Projects will lead construction in the plant’s first phase, which entails building 500,000 square feet of planned cleanroom space, said Micron vice-president Gursharan Singh.
The US company expects to begin construction of phase II in the second half of the decade, which will be similar in scale to the current project. In all, the project will directly generate some 5,000 new jobs and spur the creation of around 15,000 additional jobs in the larger community over the next several years, according to company estimates.
Terming the launch as a “milestone moment,” minister of state for electronics and IT Rajeev Chandrasekhar said India will be considered as a serious destination for semiconductor units now, “looking at how quickly the approvals for the Micron facility have been granted.”
‘India a trusted partner’
India’s position as a “trusted partner” in the global value chain of electronics and semiconductors has been bolstered by the launch of this new facility, according to Chandrasekhar, who called it the beginning of a journey to become a “semiconductor nation.”
“This vision covers all aspects, including design, research, talent development, packaging and fabrication. In just over a year, we have made tremendous progress in all these areas,” he said.
Strategic, economic reasons
The Micron plant becomes the first under the government’s ambitious push to kickstart a chip manufacturing ecosystem for both, economic as well as strategic and security reasons. It is expected to eventually pave the way for fab proposals to come in that will strengthen India’s ambitions in the sector.
Micron has so far hired 34 employees for the plant, Singh said. The unit will produce packaged chips by December 2024 and will initially focus on exports, until the domestic chip market develops, he added.
The government is also looking to support ancillary industries that will come up. Government officials said five suppliers to Micron are also looking to set up their plants in India.
Singh said the government has granted land and approvals to suppliers of Micron, with one such company being Simtec Systems. “There is a lot of land that has been earmarked by the government of Gujarat for the ancillary industry,” Vaishnaw said.
Semiconductor demand is expected to grow from INR2 lakh crore to INR5 lakh crore in coming years, according to the minister, who said the focus will be to have semiconductor projects in areas that can help export technology.
“India is already a very large design hub. With manufacturing coming to India, the entire process and value chain will come to our country, and Bharat will become a major semiconductor hub,” said Vaishnaw.
