Micron's Entry into Chip Deal Boosts India's India’s plans

Micron Technology's decision to invest up to $825 million in a new assembly and test facility in Gujarat aligns with the goals of both India and the United States. With support from the Central and state governments, the total investment in the facility will reach $2.75 billion, complementing Prime Minister Modi's ambitious $10-billion incentive plan for chip manufacturing. For the US, Micron's move reflects a strategy to reduce business risks associated with China while fostering closer economic integration between the US and India. Last month, the Biden administration was displeased when Beijing banned Micron products, citing a failed security review.

The construction of the new facility is expected to commence soon, with the first phase set to become operational in late 2024. Although the facility will focus on testing and packing semiconductor chips rather than manufacturing them, it still contributes to India's vision of becoming a semiconductor hub. In addition to Micron's investment, US semiconductor toolmaker Applied Materials plans to invest $400 million in a new engineering center, and Lam Research intends to train 60,000 engineers. India's historical emphasis on software-related expertise has yielded notable results in various digital technologies. However, cracking the hardware puzzle poses a different challenge. Merely offering subsidies will not be sufficient to relocate chip supply chains. The key lies in establishing larger clusters capable of supporting manufacturing, ensuring long-term operations, and facilitating technology transfer.

The global chips market is projected to reach $1 trillion by 2030. As a resource-intensive industry that demands highly skilled workers, the semiconductor sector is already grappling with a skills gap. As India embarks on its silicon journey, there will be an increase in semiconductor job opportunities. Leveraging its talent pool, India must seize this opportunity and devise ways to provide hands-on, industry-relevant training to engineering students. Taiwan serves as an example in this regard, with its success attributed to public-private partnerships that prioritize training and certification programs.