India’s cabinet has given its approval to Micron Technology, a U.S. chipmaker, for its $2.7 billion plan to establish a new semiconductor testing and packaging unit. This decision was made in anticipation of Prime Minister Narendra Modi’s upcoming visit to the United States, Reuters news report said.
The Indian government has agreed to provide production-linked incentives worth 110 billion rupees ($1.34 billion) for the construction of the plant, which is slated to be located in Gujarat, Modi’s home state.
As part of his visit, which commences on Tuesday, Modi will hold meetings with the CEOs of several prominent American companies. Furthermore, he will attend a state dinner at the White House on June 22.
Micron Technology’s initiative aligns with the White House’s efforts to encourage U.S. chip companies to invest in India.
Reuters has been informed by U.S. administration officials that discussions are ongoing regarding potential additional investments. US President Joe Biden aims to reduce business risks associated with China while fostering stronger integration between the U.S. economy and the world’s largest democracy.
In May, China announced that it subjected Micron to a security review and banned operators of crucial domestic infrastructure from purchasing products from the largest memory chipmaker in the United States. This action by China provoked the ire of the Biden administration, although the U.S. Commerce Department refrained from commenting on the matter.
An industry source in India familiar with Micron’s approvals disclosed that the Assembly Testing Marking and Packaging facility, which tests and packages semiconductor chips but does not manufacture them, will be constructed in the city of Sanand. Micron may handle chip procurement and packaging for its clients at the plant, or other companies could opt to send their chips for testing prior to shipment.
