Micron is looking for partners to expand Sanand plant, start constructing 2nd phase of chip factory

Micron Technology is planning the expansion of its semiconductor plant in Sanand, Gujarat, and is now looking for new construction partners for the second phase of the project. The company has invited bids, with Larsen & Toubro and KEC International among the firms being considered.

This comes after delays in the first phase of the project, which was originally expected to be completed in 2024 but is now scheduled to be operational in early 2025. Tata Projects had been awarded the contract for the first phase in September 2023, but sources suggest Micron may be evaluating other vendors due to construction setbacks.

Overcoming delays and moving forward

Micron’s semiconductor facility in Gujarat is the first project approved under India’s Semiconductor Mission (ISM). With a total investment of $2.75 billion, Micron is contributing $825 million, while the Indian government is covering 50 per cent of the cost and the Gujarat state government is providing an additional 20 per cent in incentives.

Despite strong financial backing, the project has faced delays. The first phase, which includes 500,000 square feet of cleanroom space, is yet to be completed. Industry sources indicate that Micron has been actively seeking new engineering firms for the second phase over the past two months, possibly looking to avoid further setbacks.

Government officials acknowledge that the initial 24-month timeline was ambitious, but they remain optimistic that the facility will start producing its first chips this year. The project is a key part of India’s strategy to strengthen its semiconductor industry and reduce dependence on global supply chains.

Expanding semiconductor capabilities in India

The second phase of Micron’s facility will focus on assembly and testing, known as OSAT (Outsourced Semiconductor Assembly and Testing). This stage involves packaging, testing, and ensuring the quality of semiconductor chips before they are distributed. The facility will also manufacture ball grid array (BGA) integrated circuit packages, memory modules, and solid-state drives.

Tata Projects, which is handling the first phase, has reported that 60 per cent of the work is complete, with the remaining construction expected to be finished by the end of 2025. However, with Micron now considering new partners for the next phase, it appears the company is looking to ensure a smoother and faster execution of its expansion plans.

When Micron signed an agreement with the Gujarat government in June 2023, it projected that the facility would generate 5,000 direct jobs and an additional 15,000 indirect jobs. As India accelerates its efforts to become a major player in semiconductor manufacturing, Micron’s Sanand plant remains a critical part of that vision.

For now, Micron’s priority is securing the right partners to keep the project on track. With Phase 2 in motion, the focus is on avoiding further delays and ensuring the facility plays a key role in India’s growing semiconductor ecosystem.