India is about to approve Micron’s $3 billion semiconductor testing and assembly facility.

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According to persons in the know who spoke to ET, India is prepared to sanction a $3 billion investment from US semiconductor company Micron to establish an OSAT operation with at least four assembly lines.

According to insiders, the corporation with its headquarters in Idaho will initially invest around $2.5 billion, with more investments likely to be made over a five-year period.

This will be the first such permission of an OSAT facility by the central government, which has presented a Rs 76,000 crore package to launch semiconductor manufacturing in the nation. OSAT is also known as Assembly Testing Marking and Packaging (ATMP) unit.

The Micron board of directors and government representatives have held numerous rounds of discussions. An individual who is aware of the specifics said that the Micron board has been requested for information regarding its intended investment, the capacity it wants to develop, and the government assistance it wants in order to speed up the process.

Due to their ability to perform the essential functions of silicon chip testing and packing, ATMP/OSAT machines are a significant link in the semiconductor production process.

Typically, these units cost up to $5 billion to build, as opposed to semiconductor fab units, which cost between $10 and $15 billion. People who are familiar with Micron’s proposal claim that it was initially submitted in March of this year to the expert group charged with examining projects under the India Semiconductor Mission (ISM). The ATMP/OSAT category will no longer be accepting submissions after December 2024.

The suggestion that they (Micron) provided was well received by the committee. Additional last-minute due diligence is currently being carried out. As a lot of taxpayer money is at stake, the process is rigorous. A senior government official told ET on Friday that the plan was being considered and might be approved soon.

When asked about the specifics of the proposed investment and whether the Indian government had requested further information in order to accelerate the company’s approval, Micron India did not comment.

Three offices of Micron, a US company founded in Idaho in 1978, are located in India: one in Bengaluru and two in Hyderabad. The partial embargo imposed on the corporation by China, according to sources, may have also influenced the decision to diversify the company’s supply chain inside the nation.

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