US memory chip firm Micron Technology said on Thursday it would invest up to $825 million in a new chip assembly and test facility in Gujarat, India, its first factory in the country.

Micron said that with support from the Indian central government and from the state of Gujarat, the total investment in the facility will be $2.75 billion. Of that total, 50 percent will come from the Indian central government and 20 percent from the state of Gujarat.

Reuters reported earlier this week that India's Cabinet approved the project ahead of Prime Minister Narendra Modi's state visit to the US, which kicked off on Wednesday.

Micron said construction of the new facility in Gujarat is expected to begin in 2023 and the first phase of the project will be operational in late 2024. A second phase of the project is expected to start toward the second half of the decade, it said. The two phases together will create up to 5,000 new direct Micron jobs.

Earlier this week, the Indian government reportedly approved the US chipmaker's plan for a new semiconductor testing and packaging unit in the country. A senior government source informed of the development on Tuesday ahead of Prime Minister Narendra Modi's state visit to the US. Cabinet approval was required due to the size of the incentive package, the source added. Micron's plan had been previously reported but not approved by the cabinet.

Micron Technology's plans come as the White House presses US chip companies to invest in India with talks ongoing about possible further investments, US administration officials told Reuters.

An Indian industry source familiar with Micron's approvals said the so-called Assembly Testing Marking and Packaging will be built in the city of Sanand. © Reuters