The Centre has cleared Micron Technology's plan to invest $2.7 billion in setting up a semiconductor testing and packaging unit in Gujarat,

The government has offered production-linked incentives worth Rs 11,000 crore to the proposed facility, which is expected to create 5,000 jobs.

"The project was cleared by the cabinet about a week back," sources said.

The project clearance is expected to be officially announced following the meeting of Prime Minister Narendra Modi with Micron CEO Sanjay Mehrotra in the US.

Micron specialises in computer memory products and flash drives. It will set up the OSAT plant which will test and package its products.

Micron's OSAT (outsourced semiconductor assembly and test) proposal was cleared after the government modified the semiconductor programme and increased the incentives.

The ATMP (also referred to as OSAT) is a key part of the semiconductor ecosystem.

After wafers are made at wafer fabs or foundries, ATMP units slice the wafers into chips, package them and test them for electronic products.

This move comes as Micron aims to diversify its geographic footprint amid US-China tensions.

It marks a significant step for the “Make in India” initiative and provides an opportunity for the US to bolster key supply chains outside China.

Micron’s investment in India comes on the heels of a Chinese ban on using Micron chips in critical infrastructure, posing challenges for US chipmakers in the world’s largest semiconductor market.

By expanding in India, Micron seeks to reduce its dependence on the Chinese market while tapping into India’s vast consumer base and skilled workforce.