Micron will invest up to $825m in the project. Credit: Tada Images via Shutterstock.

Micron Technology has announced plans to build a $2.75bn semiconductor assembly and testing facility in the Indian state of Gujarat.

The proposed facility will focus on the assembly and testing of both DRAM and NAND products to cater to domestic and international demand.

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Micron will construct the unit in two phases, with phase 1, which will include 500,000ft² of cleanroom space, expected to be operational by late 2024.

The second phase of the project is expected to start in the second half of the decade and involve building a facility of a size equivalent to Phase 1.

Over the course of the project, Micron will invest up to $825m, which is expected to create up to 5,000 new direct jobs.

India’s federal government will provide Micron with 50% of the financial support needed to complete the project, and the state of Gujarat will provide incentives worth 20% of the overall cost. The combined investment by Micron and the two government entities over the course of both phases will be up to $2.75bn.

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Micron president and CEO Sanjay Mehrotra said: “Our new assembly and test location in India will enable Micron to expand our global manufacturing base and better serve our customers in India and around the world.”

The investment forms part of Micron’s strategy to meet anticipated long-term demand for memory and storage while enhancing its worldwide assembly and test network.

Indian Union Cabinet Minister for Railways, Communications, Electronics and IT Ashwini Vaishnaw said: “This investment will be a crucial building block in the country’s blossoming semiconductor ecosystem.”

Last week, the US-based chipmaker said it plans to invest $600m in its Chinese chip packaging facility.

Separately, Applied Materials, another US-based firm focused on the chip industry, announced plans to build a $400m collaborative engineering centre in Karnataka, India.

Located in Bangalore, the centre will focus on the development and commercialisation of technology for machinery used in semiconductor fabrication.

Applied Materials president of the semiconductor products group Prabu Raja said: “We envision Applied’s strong base of engineering talent collaborating more deeply with domestic and global companies operating in India to strengthen the foundational equipment supply chain serving the global semiconductor manufacturing industry.”