Dive Brief:
- Micron Technology plans to build a $2.75 billion semiconductor assembly and test facility in Gujarat, India, which will be the company’s first in the country.
- The U.S. chipmaker is partnering with the government of India on the project — Micron will invest up to $825 million, while the central government will pay half the total cost and the state of Gujarat will offer incentives representing 20% of the cost, according to the company.
- The 500,000-square-foot project will begin construction later this year, with initial production slated to begin in late 2024. A second phase of the project is set to begin construction in the latter half of the decade.
Dive Insight:
Micron's new project is part of the company's plan to widen its global manufacturing supply chain.
The site will service both global customers and those in India. It's Micron's eleventh manufacturing site around the world, adding to a list that includes two U.S. sites, one in China and two in Taiwan.
"We are excited about the steps India is taking to develop the local semiconductor ecosystem,” Micron President and CEO Sanjay Mehrotra said in a statement.
The announcement came during India Prime Minister Narendra Modi's visit to the U.S. last week, during which he met with President Joe Biden and discussed the countries' desire to encourage co-development and co-production opportunities in key tech industries.
The two leaders called out the signing of a memorandum of understanding on Semiconductor Supply Chain and Innovation Partnership as an important step forward in coordinating chip incentive programs, including commercial investments, research and talent development.
The Biden administration has been pushing more companies to invest in India in recent months amid tensions between China and the U.S. As part of that push, Biden and Modi met with executives from Apple, Microsoft and Google parent company Alphabet to discuss future collaboration between the two countries.
"We’re teaming up to design and develop new technologies that are going to transform the lives of our people around the world," Biden said during the roundtable. "Our countries are taking innovation and cooperation to a new level in our relationship, and thanks in large part to the folks around this table."
Companies like Apple and Micron are among a growing list of U.S. players looking to India for production needs as companies look to diversify critical supply chains away from China.
Apple supplier Foxconn broke ground in May on a $500 million facility in the state of Telangana. Reports began surfacing late last year that Apple was pushing to shift more production out of China, including to India.
Also last month, Cisco announced plans to begin manufacturing in the country as part of a plan to diversify its supply chain. The company aims to export $1 billion worth of goods exports and domestic market production over the next few years.
Micron competitor Intel said last September it had no current plans to manufacture in India, but it is also pushing to diversify its production network. The company is growing its footprint in Europe, with plans to build an assembly and testing site in Poland and increase a chip fabrication plant in Germany.
