US memory chipmaker Micron Technology is close to committing $1 billion to $2 billion (₹8,200 crore-₹16,400 crore) to build a semiconductor-packaging factory in India
What Happened? The firm is close to an agreement for the major investment, which it could officially be announced during Prime Minister Narendra Modi‘s upcoming visit to the US, sources told Bloomberg.
The firm’s latest move is seen as part of its strategy to diversify its geographic presence amid ongoing tensions between the US and China.
The potential agreement would align with Modi’s ambitious “Make in India” initiative, aimed at promoting domestic manufacturing and attracting foreign investment. At the same time, it would give the US an opportunity to strengthen critical supply chains outside of China – a key objective emphasised by US National Security Adviser Jake Sullivan during his recent visit to New Delhi.
The investment plans come in the wake of China’s ban on the use of Micron chips in critical infrastructure, creating uncertainty for US chipmakers in the world’s largest semiconductor market. In response, Micron recently pledged an additional $600 million (₹5,000 crore) investment in its Chinese plant, saying it was committed to the world’s second-largest economy.
Get Ring The Bell, Benzinga India’s weekly briefing. Designed specifically for investors like you.
The move also reflects the broader US strategy of diversifying advanced chip manufacturing, particularly in light of growing tensions with China and concerns cast a pall over an overreliance on Asian manufacturing centers, such as Taiwan. Micron, the largest US memory chipmaker, has already secured financial support for a $3.6 billion (₹29,500 crore) next-generation plant in Japan.
Modi has pledged $10 billion as part of India’s efforts to attract chipmakers, with the Indian government offering to bear half the cost of setting up semiconductor sites.
It was also earlier reported that the Biden administration was urging India to flatten bureaucratic hurdles and take forward a long-awaited deal for US-made armed drones ahead of Modi's upcoming visit to Washington. Meanwhile, General Electric and Hindustan Aeronautics Limited (HAL) are also set to announce a deal to co-produce jet engines for India's fighter jet program during the visit.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.