Micron Plant: Will Construction Delay Jeopardise 2025 Chip Rollout Goal?

Amid delays in construction, American memory chipmaker Micron Technology is moving forward with the second phase of its Sanand factory. The $2.75 billion chip plant’s first phase is facing delays, and the company is now looking to move on from Tata Projects.

The American chipmaker, which secured the first government incentive under the India Semiconductor Mission, is now seeking a new construction partner for the second phase of the project, according to a report by The Economic Times (ET). When contacted regarding the delay, the chipmaker declined to comment. 

Micron has reportedly invited bids from engineering companies, with L&T and KEC International among those interested.

Delays in the Sanand Factory

In June 2023, when Micron announced the facility, it said that the phased construction of the new chip assembly and test facility in Gujarat was expected to begin in 2023. 

Phase 1, which includes 500,000 square feet of planned cleanroom space, was initially expected to become operational by late 2024. The chipmaker also said that Phase 2 of the project, which would involve the construction of a facility similar in scale to Phase 1, would commence in the second half of the decade. 

The Phase 1 construction contract was awarded to Tata Projects, which finally began construction in July 2024. Earlier in January this year, Project Director Amit Agarwal said that Phase 1 would likely be completed in late 2025—delayed by a year from Micron's initial estimates. 

Agarwal noted that 60% of the work has been completed, including civil works, while work on the cleanroom is yet to begin. 

According to the ET report, the government had already warned Micron that its timeline was overly ambitious. 

First Chip in 2025

Despite the construction delays, government officials cited by the newspaper remain optimistic that the plant will produce its first chip in 2025. 

Micron India’s Managing Director, Anand Ramamoorthy, told Mint in May that the plant will start rolling out products in the first half of 2025. 

Micron Technology is investing up to $825 million in the two-phase project, which costs $2.75 billion. The Modi government will provide 50% fiscal support, while the state of Gujarat will offer incentives covering 20% of the total project cost.