India Approves US Chipmaker Micron's $2.7 Billion Plan For New Semiconductor Unit In Gujarat: Report

The Union Cabinet has reportedly approved US chipmaker Micron Technology's $2.7 billion plan for a new semiconductor testing and packaging unit in India.

The approval came ahead of Prime Minister Narendra Modi's state visit to the US.

The government has reportedly agreed to production-linked incentives worth 110 billion rupees ($1.34 billion) for the plant, which is set to be built in Gujarat, Reuters reported citing a government official.

Talks are ongoing regarding potential further investments, according to US administration officials cited in the Reuters reports.

President Biden aims to decrease the risks of doing business in China for domestic companies while better integrating the US economy with that of the world's largest democracy, an official was cited in the report.

This comes after earlier in May, China accused Micron of failing a security review in May and prohibited operators of key domestic infrastructure from purchasing products from the United States' largest memory chipmaker.

This move angered the Biden administration.

According to an Indian industry source familiar with Micron's approvals, the Assembly Testing Marking and Packaging facility will be constructed in the city of Sanand.

These units will be responsible for testing and packaging semiconductor chips, but they do not manufacture them.

Micron could use the plant to procure and package chips for clients, or other companies could send their chips for testing before shipping.