'Talent, Pure Water, Stable Power': Minister On Why Micron Chose India

Not just a few hundred jobs, but the start of an ecosystem to support manufacturing of semiconductor chips, and over 60,000 trained youth - this is how the setting up of a Micron Technology facility at Gujarat's Sanand will pave the way for India becoming a semiconductor manufacturing hub, Union IT Minister Ashwini Vaishnaw said Monday.

The statement by Mr Vaishnaw, who also holds portfolios of Railways, Electronics and Telecom, came hours after Prime Minister Narendra Modi returned from his first State Visit to the US where the deal, apart from other collaborations on US-India tech transfer, was sealed.

Mr Vaishnaw said the first made-in-India semiconductor chip from the plant will be produced in 18 months, i.e., December 2024. He added that the upcoming Micron plant in Gujarat will be a state-of-the-art plant and contribute to the expansion of the semiconductor ecosystem in India. He said the US-headquartered Micron is the fifth largest company in the space of manufacturing semiconductors that are used in mobiles, laptops, servers, defence equipment, cameras, electric vehicles, trains, cars, and telecom equipment.

Micron Technology has announced that it would set up a semiconductor assembly and testing plant at Sanand. This will see an an investment of $2.75 billion. Out of this, Micron will invest $825 million, and the rest will be a combination of incentives from the central and state governments.

Sanand and India were chosen by Micron from among several options because of the availability of "talent, ultra-pure water and ultra-stable power", the minister said.

The response came hours after the Congress questioned the need for the centre investing significantly on semiconductor chip manufacturing. The opposition party claimed that the investment was not worth the number of jobs it promised to create.

The Congress said that the "economics was not reasonable and that resources and taxpayers were being misutilised because it was merely assembling and not manufacturing".

"Taxpayers will have to bear the burden of the remaining investment of about $ 2 billion. We are investing $ 2 billion to create 5,000 jobs. That is, the cost of one employment is 4 lakh dollars or 3.2 crore rupees. The economics doesn't make any sense," Congress spokesperson Supriya Shrinate said.

Mr Vaishnaw said the Congress had attempted to bring the semiconductor industry to the country at least thrice in the past but had failed and was now speaking out of "frustration".

He said the semiconductor plant was expected to create employment opportunities for thousands of youth and attract a large number of other associated industries, from logistics to storage. This will pave the way for the country emerging as a hub for semiconductor manufacturing in the future, he said.

Calling it the foundational industry of everything from smartphones to trains to TV sets, the minister said that many countries are vying to become the world's next semiconductor hub, but it is the Narendra Modi government that had succeeded in attracting investments in emerging technology.

"Plasma has a fineness that is a lakh more times than laser... such equipment and components will also be designed in India. The machines ultimately will also be manufactured here, and with the tie-up with 104 institutions, over 60,000 youth will be trained in semiconductor engineering. This will be a force multiplier," he said.

Calling the semiconductor industry highly complex, cyclical and capital intensive, Mr Vaishnaw said the way the electronics industry has grown in India in the last nine years, "the world has confidence that we will be able to do it".

The minister had earlier said that the government was in talks with nearly half a dozen more semiconductor fabrication, packaging and testing companies that are likely to plan significant investments in the country over a year.

"Good opportunity, But Challenges Ahead"

Experts that NDTV spoke with said it is important for India to take the plunge, as the semiconductor market is expected to double from $600 billion to one to 1.3 trillion in the next 7 years, and India will also be the largest consumer of semiconductors. The Indian semiconductor market was valued at $15 billion in 2020 and is expected to reach $63 billion in the next three years.

An official in the government said the central initiative to push the building of semiconductors was domestically critical for the government's aim to develop a domestic electronics supply chain so that it can also reduce its imports from foreign countries, specifically China with whom India has seen tensions rise in the last few years.

Last year, the US passed a long-awaited bill aimed at boosting US semiconductor production to increase American competitiveness. This was aimed at addressing a semiconductor chip shortage and making the US less reliant on other countries such as China for manufacturing. The lawmakers had then said that such a measure was also important for national security.

"It is also important for India to have a voice in the sphere of semiconductor geopolitics. A strong logistical network, a robust supply chain, design, technology and value-addition, apart from support to increase our exports to truly emerge as the hub, are as important as manufacturing. Policies too have to be long-term and constantly evolving, depending on feedback from stakeholders," Arun Kumar, former professor of nano electronics at IIT-Delhi, said.