INDIA – US-based memory chip firm Micron Technology has revealed plans to invest as much as US$2 billion in building a semiconductor packaging factory in India to further diversify its geographic footprint.
Micron said that with support from the Indian central government and from the state of Gujarat, the total investment in the facility will be US$2.75 billion.
Of that total cost Micron will invest US$825 million, while the rest will be government incentives (50% will come from the Indian central government and 20% from the state of Gujarat).
According to the company, construction of the new facility is expected to begin in 2023 and the first phase of the project will be operational in late 2024.
It said that a second phase of the project is expected to start toward the second half of the decade. The two phases together will create up to 5,000 new direct Micron jobs.
US-India relations boost
Micron Technology’s plans come as the White House presses U.S. chip companies to invest in India with talks ongoing about possible further investments, U.S., reports Reuters.
Biden wants domestic companies to decrease the risks of doing business in China while better integrating the U.S. economy with that of the world’s largest democracy, one U.S. official said.
A senior Biden administration official said the White House was “encouraged” by the number of U.S. firms considering India investments.
The deal would mark a win for India’s Prime Minister Narendra Modi’s ambitious “Make in India” plans, while offering Washington an opportunity to strengthen key supply chains outside of China.
Removing barriers to technological trade between the two countries is a key part of Modi’s state visit, US national security adviser Jake Sullivan said in New Delhi last week.
China bans Micron
The Indian investment would follow a Chinese ban on the use of Micron chips in what Beijing called “critical infrastructure,” a move that cast uncertainty over the status of US chipmakers in the world’s largest semiconductor market.
China says products made by US memory chip giant are a national security risk. It means the firm’s products will be banned from key infrastructure projects in the world’s second-largest economy.
It is China’s first major move against a US chip maker, as tensions increase between Beijing and Washington.
The Biden administration has voiced concern with the move, saying the ban has no basis in fact, and US officials directly raised it with their Chinese counterparts.
It was also proclaimed that the US will not tolerate the action but has yet to detail any steps to respond to it.
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