US-based semiconductor giant Micron, to set up an outsourced semiconductor assembly and testing (OSAT) plant at Sanand in Gujarat entailing with a investment of $2.75 billion.

Of this, Micron will invest $825 million while the rest will be a combination of incentives from the central and state governments, according to the company.

With the planned investment, Micron will become the first of the large global players to set up a semiconductor testing facility in India.

The construction of the proposed Gujarat facility is expected to start this year and will include 500,000 sq ft of planned cleanroom space.

Micron plans to start operations from the unit in 2024, adding that it will ramp up the capacity over time.

“Micron expects phase 2 of the project, which would include construction of a facility similar in scale to phase 1, to start towards the second half of the decade,” the company says.

The project is being set up under the India Semiconductor Mission’s Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme.

ATMP/OSAT units are an important link in the semiconductor manufacturing chain as they perform the crucial tasks of testing and packing silicon chips.

The proposed unit is expected to create 5,000 direct and nearly 15,000 indirect community jobs over the next several years.

Government support will help fund the project and facilitate access to essential semiconductor infrastructure and resources to drive innovation and enhance local talent development, according to the company.

While the incentives from the central government will be 50 percent of the total project cost, the state government is expected to give additional incentives, which will be about 20 percent of the total cost.