The investment is expected to be announced during Prime Minister Narendra Modi’s visit next week to the United States, marking a significant step for India’s “Make in India” initiative and providing an opportunity for the US to bolster key supply chains outside of China.

Micron Technology Inc., a leading American memory chipmaker, is reportedly nearing an agreement to invest up to US$2 billion, in setting up a semiconductor packaging factory in India. This move comes as Micron aims to diversify its geographic footprint amid US-China tensions. The investment is expected to be announced during Prime Minister Narendra Modi’s visit next week to the United States, marking a significant step for India’s “Make in India” initiative and providing an opportunity for the US to bolster key supply chains outside of China.

Diversifying Supply Chains

With concerns over reliance on Asian manufacturing centers like Taiwan and amid growing tensions with China, the United States is actively seeking to diversify its advanced chipmaking capabilities. Micron’s investment in India aligns with this goal and represents a strategic move to mitigate risks associated with geopolitical uncertainties.

Prime Minister Modi’s ambitious “Make in India” plans have been instrumental in attracting investment and promoting domestic manufacturing. By pledging US$10 billion to woo chipmakers to India and offering to bear half the cost of setting up semiconductor sites, the Indian government aims to position the country as a global manufacturing hub. Micron’s investment in India’s chip packaging plant would be a significant win for the “Make in India” initiative, showcasing India’s growing prominence in the global semiconductor industry.

Strengthening Indo-US Technological Trade

Removing barriers to technological trade between India and the United States is a key objective of Prime Minister Modi’s state visit. The potential investment by Micron not only solidifies bilateral relations but also strengthens key supply chains that are crucial for both nations. US National Security Adviser Jake Sullivan had earlier this week emphasized the importance of advancing technological collaboration during his visit to New Delhi, highlighting the shared goals of both countries.

Micron’s investment in India comes on the heels of a Chinese ban on the use of Micron chips in critical infrastructure, posing challenges for US chipmakers in the world’s largest semiconductor market. By expanding its manufacturing footprint in India, Micron seeks to reduce its dependence on the Chinese market while tapping into India’s vast consumer base and skilled workforce.

Future Prospects

In addition to the investment in India, Micron recently secured financial support for a US$3.6 billion next-generation plant in Japan. These strategic moves reinforce Micron’s commitment to diversifying its operations and strengthening global supply chains. The investments also signify the growing recognition of India and Japan as key players in the semiconductor industry.

Micron Technology’s prospective investment in India’s chip packaging plant signifies a significant milestone for both sides. It showcases India’s emergence as a preferred investment destination and bolsters the “Make in India” initiative. Simultaneously, it allows the American company Micron to navigate complex geopolitical dynamics and diversify its manufacturing capabilities. This move highlights the importance of collaboration between the United States and India in advancing technological trade and securing critical supply chains. As Prime Minister Modi’s visit approaches, the anticipated announcement of Micron’s investment reinforces the positive trajectory of India’s semiconductor industry and its growing role in the global market.

https://www.financialexpress.com/business/defence-microns-multi-billion-dollar-investment-in-indias-chip-packaging-plant-strengthens-global-supply-chains-3130948/