India’s cabinet has approved a $2.7 billion plan to build a new Micron Technology chip packaging and testing facility in the country. The government took the move just ahead of Indian Prime Minister Narendra Modi’s visit to the United States.
The information that Micron is planning to build a plant in India appeared only recently and has now been confirmed. The plant is to be built in Modi’s home state of Gujarat. According to Reuters sources, the government has agreed to provide $1.34 billion worth of production-related benefits. The collaboration is likely to be officially announced during the Prime Minister’s ongoing visit to the United States.
Sources said an unprecedentedly large package of benefits required cabinet approval. Micron itself has not yet commented on the news and representatives of the Indian authorities are silent. It is known that during the visit, Modi will meet with heads of leading US companies, including FedEx and MasterCard, and will also attend an official White House dinner on June 22.
US officials have told Reuters that the US is urging US semiconductor companies to invest in India and that talks are underway for further investment in the country. The fact is that US President Joe Biden wants American companies to reduce the intensity of interactions with China while strengthening economic ties with “the world’s largest democracy.” In May, China announced that Micron had failed security clearance, and authorities banned local infrastructure operators from buying products from the largest US chipmaker, predictably angering the Biden administration.
As you know, the new plant will not be engaged in the actual production of chips, only packaging and testing will be carried out here. For example, customers are not allowed to order packaging, but rather send in ready-made solutions for testing. According to sources, India expects real success when the actual production of semiconductor crystals is organized.
Earlier this month it was reported that three major companies, including stimulus-calling joint venture Foxconn, are suffering from a virtual lack of significant technology partners in India.