Days after the Centre to boost semiconductor and electronics manufacturing in the country, the Union government has approved the proposals of US-based Micron Semiconductor and Bengaluru-based Aequs to set up SEZs for the same.

While the US-based semiconductor company will invest INR 13,000 Cr to set up a SEZ facility across 37.6 hectares in Gujarat’s Sanand for manufacturing semiconductors, Aequs will invest INR 100 Cr for a SEZ built across 11.6 hectares in Karnataka’s Dharwad to manufacture electronic components, the commerce ministry said.

“The board of approval for SEZs has accorded approval to the proposals received from Micron Semiconductor and Aequs Group for setting up of SEZs for manufacturing of semiconductors and electronic components, respectively,” the statement said.

Notably, the Centre made the following amendments in SEZ Rules, 2006 to promote semiconductor and electronic components manufacturing:

Rule 5: SEZ set up exclusively for manufacturing of semiconductors or electronic components will now require only 10 hectares of land area as against 50 hectares earlier.

Rule 7: SEZ can be set up on land which is mortgaged or leased to the Centre or state government or their authorised agencies, thus relaxing the erstwhile requirement of an “encumbrance-free” land.

Rule 53: The value of goods received and supplied on a free-of-cost basis will be included in net foreign exchange (NFE) calculations and assessed using applicable customs valuation rules.

Rule 18: SEZ units in the semiconductor and electronics component manufacturing sector will be allowed to also supply domestically into the domestic tariff area after payment of applicable duties.

The government said that the steps will catalyse the growth of the semiconductor manufacturing ecosystem in India and increase tech-oriented job roles.

The move has been welcomed by the industry. India Electronics and Semiconductors Association’s (IESA) president Ashok Chandak believes that the policy reforms make it easier for companies to establish facilities and chip and electronic manufacturing production in the country.

“By liberalising the policy and aligning it with the realities of land availability and global competitiveness, the government has reinforced India’s ambition to become a global electronics manufacturing destination. These measures will particularly benefit the manufacturing of strategic components such as Discrete Semiconductors, IC’s, PCBs, display and camera modules, battery packs, passive components, and Li-ion cells—core building blocks for devices ranging from smartphones and EVs to data centres,” Chandak said.

The development comes at a time when Micron is looking to aggressively expand its operations in India.

In 2023, the Nasdaq-listed company announced its plans to build an assembly and test facility in Sanand. The new facility, whose construction is expected to culminate after two phases, will enable assembly and test manufacturing for both DRAM (dynamic random access memory) and NAND products and address demand from domestic and international markets.

The company’s investment will be up to $825 Mn over the two phases of the project and aims to create up to 5,000 new direct jobs.

Back then, Micron said it would receive 50% of the fiscal support for the total project cost from the Centre’s “Modified Assembly, Testing, Marking and Packaging (ATMP) Scheme” as well as a 20% of the total project cost from the Gujarat government.

“The combined investment by Micron and the two government entities over the course of both phases will be up to $2.75 Bn. Government support will help fund the project and facilitate access to essential semiconductor infrastructure and resources to drive innovation and enhance local talent development,” Micron said then.

In August 2024, the government started . Back then, MeitY secretary S Krishnan said the plant would be operational by December 2025.

Meanwhile, for Aequs, the approval comes at a time when it is heading for an IPO. Last week, the contract manufacturing company took the confidential route to .

Founded in 2006 by Aravind Melligeri, Aequs is a diversified contract manufacturing startup catering to the needs of entities operating in the aerospace, toys and consumer durable goods industries. It operates manufacturing units across India, France, and the US, and counts Airbus, Boeing, Safran, Dassault and Collings Aerospace among its clients.

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