The Indian government cabinet has approved U.S. chipmaker Micron Technology, Inc’s (NASDAQ:MU) $2.7 billion plan for a new semiconductor testing and packaging unit.
The government agreed to production-linked incentives worth ₹110 billion ($1.34 billion) for the plant, to be built in the state of Gujarat, Reuters cites a senior government source.
Micron will build the assembly testing, marking, and packaging unit in Sanand. Such divisions test and pack semiconductor chips but do not manufacture them.
Indian PM Narendra Modi will meet the CEOs of several top American companies, including FedEx Corp (NYSE: FDX) and Mastercard Inc (NYSE: MA), followed by a state dinner in the White House on June 22.
Micron’s plans coincide with the White House pressing U.S. chip companies to invest in India to decrease business risks in China.
While Micron’s India plant would boost India’s vision of a semiconductor base, true success would need actual manufacturing. Three big companies, including a Foxconn joint venture, that bid for Indian semiconductor incentives struggled due to the lack of a technology partner.
China in May said Micron had failed a security review and barred operators of critical domestic infrastructure from purchasing products from the chipmaker.
Price Action: MU shares traded lower by 0.03% at $66.88 premarket on the last check Wednesday.
