US chipmaking giant Micron starts construction of $2.75 billion semiconductor factory in Gujarat

The plant is expected to be ready by December 2024. The company has also hired 34 students from local universities

Published: Sep 25, 2023 01:13:51 PM IST

Updated: Sep 25, 2023 10:00:42 PM IST

Micron starts construction of $2.75 billion semiconductor factory in Gujarat; Image: Reuters/Dado Ruvic

About forty kilometres from the city of Ahmedabad—spread across 93 acres inside Gujarat Industrial Development Corporation’s (GIDC) industrial estate in Sanand—Micron Technology laid the foundation for constructing its first semiconductor plant in the state, which is expected to be ready by December 2024. Three months after signing an agreement with the government of India, the chip-making giant commenced the construction of the factory on September 23.

Micron has selected Tata Projects to establish this assembly and test facility, which will focus on transforming wafers into ball-grid array (BGA) integrated circuit packages, memory modules, and solid-state drives. The company has announced a total investment of $2.75 billion. Out of this, Micron would invest up to $825 million over the two phases of the project, and the rest of the investment would come from the central and state governments. The memory chipmaker will receive 50 percent fiscal support for the total project cost from the Indian central government and incentives representing 20 percent of the total project cost from the state of Gujarat.

The facility will be equipped with both hardware and system automation end-to-end, from assembly to the test area. The inventory and warehouse storage will be automated for efficiency purposes. Micron will also be building advanced process controls with smart manufacturing solutions. The new 1.4 million-square-foot facility will have 500,000 square feet of clean room space, and this facility will be operational by the end of next year. Micron will ramp up capacity gradually over time in line with global demand trends. Phase two of the project will be initiated in the second half of the decade.

In an effort to develop the talent pipeline, Micron has already started hiring activities. The Boise, Idaho-based chipmaker has 80 positions filled and lined up internship programmes with local universities, where the first batch of 25 interns will join in January 2024. A team of 34 newly-hired freshers was present during the ground-breaking ceremony. A major chunk of these students were recruited from Ahmedabad’s Nirma University. “We are very excited to be the first batch of this key milestone for India. For the initial three months, we will undergo training in Malaysia, and after that, we will be assigned roles and responsibilities. We are happy with the salary package we have received, which is unusual for freshers,” said the students who are currently in the last semester of the college.

This young talent will be stationed at the existing Micron site for a few months, where they will go through in-depth training to be equipped with the technical and semiconductor skills to support the new site. Micron also has plans to engage with universities in Gujarat to design and develop an assembly, testing, marking, and packaging (ATMP)-based curriculum for future talent development.

Micron predominantly makes two products: DRAM and NAND. DRAM is used as the main memory or RAM of a device, where it temporarily holds the data and instructions that the processor needs to run applications. NAND is used as a storage device that doesn't need power to retain data, like a portable flash drive. Founded in 1978, Micron has 11 manufacturing sites across the world, and the first one is coming up in India. The plant will also be India's first in the high-end semiconductor fabrication ecosystem. Meanwhile, Micron's investment in India also comes at a time when the company is facing a financial slowdown, primarily due to a partial ban in China.

Also Read- Apple, Micron Technology, First Solar: India is bagging mega tech projects that a few years ago would have been China-bound. But can this sustain?

Through this facility, the American memory chip giant will serve as a catalyst, drawing more companies from the semiconductor supply chain to establish their presence in Gujarat. “It is therefore imperative that the government and industry work closely together to establish a semiconductor cluster with robust technology and a supply chain ecosystem that will allow us to scale and achieve sustained growth in the long run,” said Micron’s Gursharan Singh, the senior vice president of global assembly and test operations.

In July last year, the Gujarat government announced the Gujarat Semiconductor Policy 2022-2027, making it the first state in India to introduce a dedicated policy targeted at attracting investments in the chip manufacturing sector. The state has also established a dedicated Gujarat State Electronics Mission (GSEM) under the Department of Science and Technology to assist and attract global investors.

Two more semiconductor proposals are under process and are expected to take shape in the coming few months. “In December 2024, we should see the first made-in-India chip coming out of the Micron plant. This has given huge momentum and confidence to the entire semiconductor industry all across the world,” Union Minister for Railways, Communications, Electronics, and Information Technology Ashwini Vaishnaw told Forbes India. “We are receiving lots of inquiries from across the world, and we believe that within the next couple of months, we will get many more proposals for semiconductors. India has very good expertise in design already. Skill and talent creation are part of our semiconductor policy, which is succeeding very well. It's a very methodical way in which we are working with the industry to get this skill,” he added.

Also Read- There is no global semiconductor company that does not have an R&D centre in India: Rajeev Chandrasekhar

Tata Projects, which has bagged the contract to build Micron’s plant, will be designing the facility in accordance with the LEED Gold Standards of the Green Building Council and will also integrate advanced water-saving technologies, enabling a zero liquid discharge system. Speaking with Forbes India on the sidelines of the ground-breaking ceremony, Vinayak Pai, managing director and chief executive officer of Tata Projects, said, “There will be a lot of firsts in the technology we use on this project. We have an integrated system of identifying safety through cameras and then drones for integrated planning, progress measurement, and also construction planning. We will integrate all of that into the platform and use that as one technology stack.”

This is a major accomplishment in India's dream of high-value-added manufacturing under the India Semiconductor Mission. All the critical pieces of the puzzle are coming together to create an end-to-end supply chain for the sector, explains Chandranath Dey, India Head - Operations & BD, L&I, JLL, a global real estate services firm. “As newer companies evaluate entry into the sector, consistent government support and state-of-the art infrastructure at affordable prices will contribute to its long-term success," he adds.