New Delhi:- The Gujarat government Wednesday signed a memorandum of understanding with US-based computer memory chip maker Micron to set up a $2.75 billion semiconductor assembly and test facility in Sanand, Ahmedabad district.

Electronics and Information Technology Minister Ashwini Vaishnav said it would be India's first semiconductor manufacturing facility, adding that the first chips would be produced within 18 months.

The Memorandum of Understanding was signed here by Mr. Gurusharan Singh, Senior Vice President of Micron, and Mr. Vijay Nehra, Minister of Science and Technology, Government of Gujarat, in the presence of Prime Ministers Bhupendra Patel and Prime Minister Vaishnav. India has been dependent on chip imports for decades, and demand for chips will increase as the country's manufacturing sector grows, Vaishnav said. 

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“There have been attempts to introduce semiconductor manufacturing facilities in India for many years, and now it is becoming a reality,” he said. He emphasized that semiconductors are a basic requirement for the country's electronics industry.

The deal was struck during Prime Minister Narendra Modi's visit to the United States on June 22, and within six days the Gujarat government had allocated land and signed a memorandum of understanding, he said. "Generally, it takes him 36 to 48 months before a semiconductor chip factory starts production. "In India, the first chip will be manufactured within 18 months," Vaishnav said.

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The minister announced that other companies are also setting up semiconductor factories in India. Micron senior vice president Singh said the decision to build the Gujarat factory was based on pro-industry policies. The Sanand plant "converts (silicon) wafers into semiconductor chips," he said, adding that this will create 5,000 direct jobs and 15,000 indirect jobs. The facility will require a total investment of $2.75 billion, Singh said. 

This facility is approved under the Federal Modified Assembly, Testing, Marking, and Packaging (ATMP) Scheme. Under this program, Micron will receive financial support of 50% of the total project cost from the Government of India and an incentive of 20% of the total project cost from the Government of Gujarat.

Micron previously announced that the first phase of the facility, which includes 5 million square feet of planned cleanroom space, will begin operations at the end of 2024."Micron's new facility will enable assembly and test manufacturing of both DRAM and NAND products to meet the demands of both domestic and international markets," the statement continued. 

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Micron finally has signed an MOU with Gujarat Government for building the first Semiconductor Plant in India. The Union Electronics and Information Technology Minister Ashwini Vaishnav said it will be manufacturing the chip in just 18 months.