Micron deal: First Made-in-India chips expected by Dec 2024, says Union minister Vaishnaw

Micron will set up its semiconductor assembly and test plant in Gujarat, worth $2.75 billion.

First Made-in-India chips are expected to be rolled out by December 2024, Union Minister for Communications and IT Ashwini Vaishnaw said on Friday.

The minister said 4-5 semiconductor plants are likely to be set up in the country within a year, and computer memory chip makers Micron Technologies $2.75 billion plant will also bring around 200 smaller units as part of the ecosystem.

"First Made-in-India chip will be out by December 2024," Vaishnaw said while briefing the media after a joint statement issued by US President Joe Biden and Prime Minister Narendra Modi in the US.

He said that land allocation, factory design work and tax compliance-related agreement for the Micron semiconductor plant to be set up in Gujarat has been completed.

"First Made-in India chip from Micron is expected to come out in about six quarters from now," Vaishnaw said.

Computer storage chip maker Micron will set up its semiconductor assembly and test plant in Gujarat, entailing a total investment of $2.75 billion (around Rs 22,540 crore).

The total cost of the plant comprises $825 million from Micron and the rest from the government in two phases. Phased construction of the facility is expected to begin in 2023. Phase 1, which will include 5,00,000 square feet of planned clean room space, will be operational in late 2024.

"The turnover of this project at full capacity will be close to a billion dollars," Vaishnaw said.

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Micron has said the plant will create up to 5,000 new direct jobs and 15,000 community jobs over the next several years.

"Hopefully, we should have 4-5 semiconductor plants in the next 12 months," Vaishnaw said.

Micron is among the top five semiconductor companies in the world.

"This unit will bring along about 200 more units that are part of the semiconductor ecosystem. Some will come directly and some will come in through partnerships with other firms. They will create jobs separately. The chips coming out of this (Micron) facility will be an input in electronics, defence, car, train manufacturing etc. In a way, semiconductors are a foundational industry," he said.

The minister said that the government has modified the semiconductor scheme and asked all players who have applied earlier to file applications afresh to take benefit of the scheme.

"(For) applicants who had given their applications in January, we have asked them to resubmit their applications, modify their applications according to the modified programme so that they have the option to focus on certain sectors, fine-tune technology partners and they have the option to change their applications as per the requirement of the industry," Vaishnaw said.

Under the modified programme, the government has increased the fiscal incentive to 50 per cent of the project cost for setting up semiconductor Fabs in India of any node (including mature nodes).

Similarly, the fiscal incentive of 50 per cent of the project cost is available for setting up Display Fabs of specified technologies in India.

Earlier the scheme offered fiscal support of 30 per cent of capital expenditure to approved units for setting up compound semiconductors, silicon photonics, sensor fabs and semiconductor assembly test marking and packaging (ATMP) facilities in India.

Vaishnaw said that state governments are adding their incentive on top of support being provided by the Centre.

He said that there are very big differences between the past and the policies of Prime Minister Narendra Modi.

"In the old era, India used to scout for technology transfers. The result of the policies of the last nine years is that US and India are looking at joint development of technologies," Vaishnaw said.

Talking about local value addition in the electronics manufacturing sector, Vaishnaw said that the present government has built the scale of production, which is the first step for manufacturing and companies have already started enhancing local sourcing.

He said that the local value addition in the Indian electronics manufacturing sector is to the tune of around 20 per cent and it will increase gradually.