Micron Technology is close to an agreement to commit at least $1 billion toward setting up a semiconductor packaging factory in India, according to people with knowledge of the matter, a move to further diversify its geographic footprint at a time of US tensions with China.

An announcement could be made as soon as when Prime Minister Narendra Modi visits the US next week, said the people, who asked not to be identified because the details are private. The amount of money committed could go as high as $2 billion, one of the people said. The details could change as discussions are in progress, and there's no guarantee an agreement will be finalized.

The deal would mark a win for Modi's ambitious “Make in India” plans, while offering Washington an opportunity to strengthen key supply chains outside of China. Removing barriers to technological trade between the two countries is a key part of Modi's state visit, US National Security Adviser Jake Sullivan said in New Delhi on Tuesday.

The Indian investment would follow a Chinese ban on the use of Micron chips in what Beijing called critical infrastructure, a move that cast uncertainty over the status of US chipmakers in the world's largest semiconductor market. On Friday, Micron pledged to invest $600 million more in its Chinese plant to create jobs and support the local market.

India's Technology Ministry and Ministry of External Affairs didn't respond to requests for comment, while a representative for Micron declined to comment.

The US is pushing to diversify advanced chipmaking as growing Chinese tensions spur concerns about the world's reliance on Asian manufacturing centers such as Taiwan. Micron, the largest American memory chipmaker, also secured financial support for a $3.6 billion next-generation plant it aims to establish in Japan.

Modi starts his first formal state visit June 21, with President Joe Biden hosting him for a banquet the following day. The Indian leader will also address the US Congress. Modi has pledged $10 billion to woo chipmakers to India, promising his administration will bear half the cost of setting up all semiconductor sites.

The Business Standard newspaper had previously reported Micron was set to get Indian government approval for a $1 billion assembly and packaging facility in India. © Bloomberg LP