Micron begins construction of India’s first chip assembly plant, Tata roped in for $2.75-bn project in Gujarat

The plant is to be developed in two phases. Phase one will include a 5,00,000-square-foot clean-room space, scheduled to be operational by late 2024. Sources with knowledge of the construction deal pegged the estimated first phase cost at Rs 4,000 crore. Apart from construction, Tata Projects will also handle certain operational parts of the plant, including sourcing the equipment required to package chips.

The manufacturing facility — announced during Prime Minister Narendra Modi’s US visit this year — will be built at a total cost of $2.75 billion, with Micron investing $825 million. The Union government will bear about 50 per cent of the cost, as per its semiconductor manufacturing incentive policy. And the Gujarat government will bear around 20 per cent in the form of relief to the company.

“Our new site of 1.4 million square feet facility including 5,00,000 square feet of clean room is expected to be completed by the end of 2024. We expect to operationalise the facility by then,” said Gursharan Singh, senior vice-president, Micron Technology. “Micron expects Phase-2 of the project which will include construction of a facility similar to that of Phase-1. Micron’s investment will be $825 million over the two phases of the project and we will create 5,000 new direct jobs here in Sanand and 15,000 community jobs over the next several years.”

સાણંદ ખાતે માઇક્રોન કંપનીની એસેમ્બલી અને ટેસ્ટિંગ ફેસિલિટીનું ખાતમુહૂર્ત કેન્દ્ર અને રાજ્યના માનનીય મંત્રીશ્રીઓની ઉપસ્થિતિમાં કર્યું.

માનનીય વડાપ્રધાન શ્રી નરેન્દ્રભાઈ મોદીના દિશાદર્શનમાં ગુજરાતમાં વાયબ્રન્ટ ગુજરાત સમિટના આયોજન તેમજ ‘ઇઝ ઓફ ડુઇંગ બિઝનેસ’ની નીતિ થકી ગુજરાત… pic.twitter.com/32zOPdZwya

— Bhupendra Patel (@Bhupendrapbjp) September 23, 2023

The Assembly, Test, Marking and Packaging (ATMP) of the company is being set up over 93 acres in Sanand GIDC-II industrial estate.

Union IT Minister Ashwini Vaishnaw said Micron’s supply chain partners have visited the location and will soon set up shop there. “The supply chain elements which will feed the manufacturing process, especially aged chemicals and gases, have already come and seen the location. They have already looked at the infrastructure, and we can see that they will all be setting up the entire ecosystem,” Vaishnaw told The Indian Express on the sidelines of the event.

“…for a country that has missed opportunities for the last 70 years repeatedly through a combination of ineptness, lack of political vision, and lack of resources, this is a big moment,” said Minister of State for Electronics and IT Rajeev Chandrasekhar.

While the facility is expected to be ready by the end of next year, sources said the first chips could roll out of Micron’s assembly lines by the first quarter of 2025. The company will also need to locate supply chain partners in the plant’s vicinity.

In just 18 months since PM @narendramodi ji set out his India’s semiconductor ecosystem vision, here we are today breaking ground for Micron’s state-of-the-art modern facility in Sanand, #Gujarat along with so much more progress made.

These are exciting times under the… pic.twitter.com/CdbvHUQ1dq

— Rajeev Chandrasekhar 🇮🇳 (@Rajeev_GoI) September 23, 2023

Chandrasekhar told The Indian Express that the government was open to offering additional incentives to supply chain participants.

“We are not averse to incentives for the ancillary semiconductor industry. Having said that, today there is a built-in incentive for the supply chain partners under the semiconductor mission. We will see if there is a need to support these supply chain partners once the volume and scale of semiconductors develops in India,” he said.

The minister also highlighted the strategic importance of having a chip packaging plant within the country, especially amid a volatile geo-political situation. “Certainly today, digital autonomy which paves the way for application platforms and a device-side ecosystem is critical for any country. It is even more important with digital public infrastructure, open-source software and higher-end manufacturing,” he said.

Vaishnaw said the construction of the project began within 90 days of the agreement with Micron being signed. He said the demand for semiconductor chips in India was worth Rs 2 lakh crore and is expected to grow to Rs 5 lakh crore in the coming years.

Vaishnaw, who is also the Railways Minister, said the Vande Bharat train from Ahmedabad to Jamnagar will have a stop at Sanand. To boost the industrial town’s connectivity, the government will also launch a “high speed” train between Ahmedabad and Sanand in the next six months.

Talking about hiring strategy, Micron V-P Singh said: “In an effort to develop the talent pipeline, Micron has already started our hiring activities… We have already filled 80 positions with offers accepted and have lined up internships lined up with local universities where the first batch of 25 interns will join us in 2024. I am pleased to share that the first batch of 34 team members hired are here to witness the historic event. This young talent will be stationed at our existing Micron site for a few months where they will undergo in-depth training to be equipped with semiconductor skills to support the new site.”

Crediting Vibrant Gujarat for the investments flowing into the state, Chief minister Bhupendra Patel remembered how Sanand developed after Tata Motors set up a unit to manufacture Nano cars. “The Micron’s coming to Gujarat signifies the success of the Prime Minister’s visit to the US earlier this year,” he said.

(The reporter was in Gujarat at the invitation of the Ministry of Electronics and IT)

– With inputs from Avinash Nair in Ahmedabad