According to a Financial Times article from July 5, India will begin construction on its first semiconductor assembly factory in August and begin producing its first domestically produced microchips by the end of 2024.
According to a Financial Times article from July 5, India intends to start construction on its first semiconductor assembly factory in August and begin producing its first domestically produced microchips by the end of 2024.
The publication quoted information technology minister Ashwini Vaishnaw as saying Micron Technology would start building a $2.75 billion chip assembly and test plant in Gujarat next month.
In early June, the US-based semiconductor juggernaut Micron Technology announced its intent to invest an ambitious $825 million in the construction of a new manufacturing and testing plant in Gujarat. This facility will make it possible to assemble and test both DRAM and MAM products, meeting domestic and foreign market demand.
The complex project’s Phase 2 is anticipated to start by the end of the decade, with Phase 1 expected to be operational by the end of 2024.
The proposed Micron plant is expected to provide close to 5,000 direct jobs and close to 15,000 community jobs once it is operational.
The most recent development reinforces the Narendra Modi administration’s pledge to become India the world’s largest semiconductor hub. In keeping with this, the government announced the Semicon India Programme in December 2021 as part of the India Semicondcutor Mission (ISM) for the growth of the semiconductor and display manufacturing ecosystem in India. The budget for the programme is Rs. 76,000 crore.
To improve its competitiveness, the programme was later amended in September 2022 and reintroduced under the name “Modified Semicon India Programme.”
According to Vaishnaw in his interview with the newspaper, the government’s ISM is also putting forth “extensive work” to support other supply-chain partners, such as vendors of chemicals, gases, and manufacturing equipment, as well as businesses interested in establishing silicon wafer fabrication plants. He claimed that any nation had never established a new industry more quickly.
An international semiconductor shortage resulted from the pandemic-induced increase in demand for electronic gadgets. The semiconductor industry, like the technology sector, was largely insulated from the detrimental effects of the epidemic. However, the enormous demand for microchips crippled the global supply chain, which has yet to recover, which in turn had an impact on other key industries, such as the auto industry.
The ongoing US-Sino trade spat and other geopolitical conflicts around the world have only made the supply-chain problems worse. The US-Sino trade war is welcome news for India’s plans to establish a semiconductor industry there. With prospective partnerships with titans of the industry like Micron, India may take advantage of the current chip shortage and work to establish the largest chip base in the world there.
The Modified, Testing, Marking and Packaging (ATMP) Scheme facility proposal for Micron received approval from the Cabinet. Micron is qualified to receive from the government up to 50% of the total project cost. The Gujarati government would also provide incentives to the chipmaker because its assembly and testing facilities will be located there.
India is on an innovative mission to prove its ability to manufacture gadgets such as cellphones, batteries, electric vehicles, and other items. The Gujarat initiative by Micron will provide the nation with the crucial step it needs to strengthen its tech manufacturing sector, which has been growing slowly in comparison to other export-driven nations.
