India is poised to approve a $3-billion investment by US semiconductor company Micron to set up an outsourced semiconductor assembly and test (OSAT) unit with at least four assembly lines, Trend reports.

The Idaho-headquartered company will initially invest about $2.5 billion with more investments likely to be made over a five-year period, sources said.

This will mark the first such approval of an OSAT unit — also referred to as an Assembly Testing Marking and Packaging (ATMP) unit — by the central government which has unveiled a Rs 76,000 crore package to kickstart semiconductor manufacturing in the country.

“There have been several rounds of discussions between the board of directors of Micron and government officials. The Micron board has been asked for details of its planned investment, the capacity it wants to create, and the government help it wants so that the process can be expedited,” according to an official aware of the details.

ATMP/OSAT units are an important link in the semiconductor manufacturing chain as they perform the crucial tasks of testing and packing silicon chips.

Typically, these units require up to $5 billion investment compared to semiconductor fab units that involve investments in the range of $10 billion to $15 billion. People aware of Micron’s proposal said that it was first submitted to the expert committee tasked with reviewing projects under India Semiconductor Mission (ISM) in March this year. The deadline to accept proposals in the ATMP/ OSAT category ends in December 2024.

“The committee has really liked the proposal submitted by them (Micron). There are some additional last-minute due diligence being done right now. It is a rigorous process as a lot of public money is involved. The proposal is under consideration and may be approved soon,” a senior government official.

Micron India did not respond to queries seeking to know the details of the proposed investment and whether the Indian government had sought additional details for an expedited approval from the company.

Micron, which was established in Idaho in the US in 1978, has three offices in India — one in Bengaluru and two in Hyderabad. The company’s decision to diversify its supply chain into the country could also likely be a result of the partial ban imposed on it by China, sources said.