India aims to break ground next month on its first semiconductor assembly plant and begin producing its first domestically manufactured microchips by the end of 2024, the Financial Times reported on Wednesday. India’s information technology minister, Ashwini Vaishnaw, said US-based chipmaker Micron Technology (MU.O) would start construction in August on a $2.75 billion chip assembly and test facility in the western Indian state of Gujarat, the newspaper reported. The project will create 5,000 new direct jobs for Micron and 15,000 jobs in the broader economy over the years to come, it added.
The project is part of India’s ambitious $10 billion subsidy program for chipmakers, which recently received the nod from the cabinet. The government wants to attract manufacturers that can produce microchips using more advanced manufacturing nodes than those offered by leading global chipmakers. India’s government has revised specifications for the project to focus on companies that can produce silicon wafers with 40nm or higher technology nodes — more significant than the 28nm nodes used in current products. New Delhi is also trying to attract firms that use memory chips in devices like smartphones, tablets, and computers. It recently reopened the application process for a program to give those companies subsidies after three initial applicants — including industrial group Vedanta and Taiwanese supplier Foxconn — failed to qualify. According to the information technology ministry, the latest round of applications opened on Wednesday and will be closed in December.
The ministry aims to attract chipmakers with high operating profit margins, which will help reduce the cost of making chips in India and is also seeking to improve the country’s infrastructure for processing semiconductors. In addition to upgrading roads and railways, it is building new power plants and developing a pipeline of talent in the industry. The goal is to create a world-class Indian semiconductor ecosystem that can compete with export-led East Asian economies such as China and Japan.
Vaishnaw said the government’s Indian Semiconductor Mission was doing “extensive work” to drum up support from other supply-chain partners, such as suppliers of chemicals, gases, and manufacturing equipment, along with companies interested in setting up silicon wafer fabrication plants. “Eighteen months is when they have targeted [the first] production to come out of this factory — that is, December of 2024,” he told the Financial Times.
The cabinet gave its approval for the project in June under its Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme, with the federal government offering up to 50 percent fiscal support to the company and incentives from the state of Gujarat accounting for another 20 percent of the overall project cost. Micron’s facility in Gujarat is expected to be operational by late 2024, and the company plans to expand it into a second phase that will generate even more jobs for the local economy over the next decade. The expansion will also increase Micron’s ability to serve a growing market for memory chips used in a wide range of electronic gadgets.
