US chipmaker finalizing billion-dollar investment in India plant

US memory chipmaker Micron Technology is finalizing $1 billion to $2 billion (₹8,200 crore-₹16,400 crore) to build a semiconductor-packaging factory in India

Sources told Bloomberg that the firm is finalizing a deal for the major investment, which could be officially announced during Prime Minister Narendra Modi’s upcoming visit to the US.

The firm’s latest move is being seen as part of a strategy to diversify its geographic presence amid ongoing tensions between the US and China.

The potential agreement would be in line with Modi’s ambitious “Make in India” initiative, which aims to boost domestic manufacturing and attract foreign investment.

At the same time, it will give the US an opportunity to strengthen critical supply chains outside China – a key objective US National Security Adviser Jake Sullivan emphasized during his recent visit to New Delhi.

Investment plans in the wake of China’s ban on the use of Micron chips in critical infrastructure are creating uncertainty for US chipmakers in the world’s biggest semiconductor market. In response, Micron recently pledged to invest an additional $600 million (₹5,000 crore) in its Chinese plant, saying it remains committed to the world’s second largest economy.

The move also reflects a broader US strategy to diversify into advanced chip manufacturing, particularly in light of rising tensions with China and concerns over over-reliance on Asian manufacturing hubs such as Taiwan. US’s largest memory chipmaker Micron has already secured financial backing for a $3.6 billion (₹29,500 crore) next-generation plant in Japan.

Modi has pledged $10 billion as part of India’s efforts to attract chip makers, with the Indian government offering to bear half the cost of setting up semiconductor sites.

It was also earlier reported that the Biden administration was urging India to clear bureaucratic hurdles and move forward with the long-awaited deal for US-made armed drones ahead of Modi’s upcoming visit to Washington. Meanwhile, General Electric and Hindustan Aeronautics Limited (HAL) are also set to announce a deal for co-production of jet engines for India’s fighter jet program during the visit.