The government announced on Friday that Micron's facility in Gujarat is expected to produce the first 'Made in India' chip by December 2024. Ashwini Vaishnaw, Minister of Communications, Electronics, and Information Technology, affirmed the challenging nature of the first unit's establishment but highlighted the subsequent development of the entire ecosystem when a significant unit, like Micron, is initiated.
Vaishnaw drew parallels with the automotive sector, citing Maruti's entry, followed by Toyota, Hyundai, and eventually Tata. Stressing the significance of the inaugural unit, he anticipated the emergence of approximately 200 smaller units in the ecosystem, particularly in chemical and gas manufacturing, crucial for fabs and wafers production.
Micron Technology has pledged a USD 825 million investment as part of the USD 2.75 billion project over the next five years to establish semiconductor manufacturing in India. The products produced at Micron's India unit will serve both domestic consumption and international exports. Following a joint statement by US President Joe Biden and Prime Minister Narendra Modi, Minister Vaishnaw announced the completion of land allocation, factory design work, and tax compliance-related agreements for Micron's semiconductor plant in Gujarat. Expressing optimism, Vaishnaw anticipates the establishment of four to five semiconductor plants within the next 12 months. Micron, ranking among the top five semiconductor companies globally, is poised to significantly contribute to job creation, with expectations of generating 5,000 direct and 15,000 indirect jobs during the same period.
“President Biden and Prime Minister Modi applauded the endorsement of a Memorandum of Understanding (MoU) on Semiconductor Supply Chain and Innovation Partnership, considering it a pivotal move in aligning our nations' semiconductor incentive initiatives. This collaboration is poised to foster opportunities in commerce, research, as well as the development of talent and skills.,” the joint statement said.
Meanwhile, individuals who submitted their applications in January have been requested by the government to resubmit and modify them in accordance with the revised program. This allows them the flexibility to concentrate on specific sectors, fine-tune technology partnerships, and make necessary adjustments to meet industry requirements. Minister Vaishnaw mentioned that the Ministry has also instructed the Vedanta-Foxconn joint venture to submit a fresh proposal for semiconductor manufacturing in India, which will undergo re-evaluation. Under the revised program, the government has increased the fiscal incentive to 50% of the project cost for establishing semiconductor Fabs in India at any node, including mature nodes. This marks a notable adjustment from the previous scheme, which provided fiscal support of 30% of capital expenditure to approved units establishing compound semiconductors, silicon photonics, sensor fabs, and semiconductor assembly test marking and packaging (ATMP) facilities in India.
In the interim, Rajeev Chandrasekhar, Minister of State for Electronics and IT, highlighted that substantial declarations from major players such as Micron, Applied Materials, and Lam Research during the Prime Minister's US visit are anticipated to generate approximately 80,000 jobs. This underscores the shared commitment of the two countries to influence the trajectory of future technology. Additionally, Applied Materials, a semiconductor equipment manufacturer, has revealed plans to allocate USD 400 million over the next four years to establish a collaborative engineering center in Bengaluru.
“The Prime Minister's aspiration is to position India as a pivotal entity in the global semiconductor value chain. Over the past 75 years, India has been notably absent from the semiconductor arena, but it is now steadily emerging as a formidable player in the semiconductor ecosystem. This growth spans various facets, encompassing design, talent development, packaging, research, and the imminent establishment of semiconductor fabrication facilities.,” Chandrasekhar said.