Illustration shows Micron logo

Leading U.S. memory chip maker Micron Technology (Nasdaq: MU) is close to setting up a $1 billion assembly, testing, marking and packaging (ATMP) facility in India.

"We are close to approving the proposal," an Indian government official told the Business Standard daily, confirming the amount of the planned investment.

The company aims to use the facility in India to process some of its own wafers manufactured across the globe. The plant will operate packaging, testing, binning and marking, among other activities focused on finished chips. The plant could potentially handle a wide spectrum of Micron products, inclduing NAND flash and multiple generation DRAM.

It was not immediately clear where the facility would be set up.

Micron is yet to respond to International Business Times' email seeking comments on the report. This article will be updated when a response is received.

It was previously reported that talks between the memory chip maker and the western Indian state of Gujurat about setting up the manufacturing facilities worth $10 billion were at an advanced stage. Gujarat is the home state of Prime Minister Narendra Modi.

"Allotment of at least three lakh (300,000) square metre land parcel between Ahmedabad and Sanand is being finalized by the company. Talks with the state departments are under way," a state government source had told the Times Of India in January. "The company will soon announce setting up a manufacturing facility for data storage devices along with assembly, testing, marking and packaging."

A Micron spokesperson said the company is evaluating opportunities for potential assembly projects to meet long-term demands.

"Micron continues to evaluate opportunities for potential future assembly and test project options needed to meet long-term memory demand. We have not made any decisions regarding the timing or scope of any expansion plans," the spokesperson was reported as saying in response to questions on a potential ATMP facility.

In February 2021, it was reported that Micron India was making efforts to bring in semiconductor innovation at its operations in Hyderabad in the southern state of Telangana.

"We broadly have three sets of teams comprising sustenance (high-volume segments with large customer base), current programs and projects, and technology development," Micron India Managing Director Anand Ramamoorthy told Telangana Today in an interview. "The technology development team, which is future-centric, is looking at a new series of memory and other products, backed by 100 engineers in Hyderabad focusing on cutting-edge technologies, where products may get into production may be in the 3-5 years horizon."

The Idaho-based company, with a market cap of $66.8 billion, is the world's fifth largest player in memory and storage technologies. Headed by Indian-born CEO Sanjay Mehrotra, the company has at least 11 manufacturing sites across the world including in Japan, Malaysia, Singapore, Taiwan and China.

Last year, Mehrotra said an announcement of a new U.S. plant will be coming soon.

"We are in final stages of another high-volume manufacturing site that is going to be announced in the coming weeks," the CEO said, adding that it will be the first new memory chip factory built in the U.S. in 20 years and will create 2,000 Micron jobs by the end of the decade.

The news on Micron's India plant comes as New Delhi ramps up its efforts to invite semiconductor and display makers to the country with financial incentives under its $10 billion plan, Bloomberg reported. The government is seeking foreign companies to set up fab plants, outsourced semiconductor assembly and test (OSAT) units, ATMPs, and chip design facilities.

Last year, the Narendra Modi government increased the fiscal support for semiconductors facilities from 30% to 50% with the objective of attracting large investments for setting up semiconductor wafer fabrication facilities in order to strengthen the electronics manufacturing ecosystem and help establish a trusted value chain. Such incentives are aimed at fostering India's goal to become a world leader in the semiconductor industry.

"An investment from Micron will prove to be a significant boost for India," industry analyst Shankar Verma told IBT. "Semiconductors are in almost every modern electrical appliances. So more and more states are working on inviting investment from foreign companies to boost the industry."

Tensions between China and the West and a U.S. desire to insulate chip supply chains from dependency on Beijing have led to chip makers looking at alternative locations for their plants. India offers such companies advantages in terms of highly trained workers and raw material.

Gujurat, for example, has announced some of the sweetest support packages to encourage semiconductor investment, including a 10-year subsidy on power costs and help with land acquisition, capital investments and stamp duty reimbursements. Global chip manufacturing giants are betting big on India, with Vedanta-Foxconn signing a $20 billion semiconductor project with the government of Gujarat to set up the country's first fab unit in the state.

Taiwan's TSMC, the world's largest chip maker, has also expressed interest in establishing a chip-fabricating factory in India, with talks under way with government agencies on the plan's feasibility. Speculations are rife about a potential partnership between Indian salt-to-software conglomerate Tata and TSMC, which already has an office in Bengaluru in the southern state of Karnataka to provide support to existing customers in Asia, Europe and North America.

Representatives from these companies have been making site visits in Gujarat, Karnataka and also the Tamil Nadu state for proposed semiconductor units, as per senior officials from the Indian Ministry of Electronics and Information Technology.