New Delhi | The government has cleared US-based chip maker Micron's project to set up a semiconductor test and packaging unit worth USD 2.7 billion in the country, according to sources.

The approved project is expected to create 5,000 jobs.

"The project was cleared about a week back," a source said, confirming details of the project.

Micron specialises in computer memory products, flash drives etc.

It will set up an OSAT plant in India which will test and package its product to make it ready for use.

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

In the first phase, the government had cleared four OSAT projects which included proposals by Tata Group, Sahasra Semiconductors.

"Sahasra Semiconductors is the first OSAT plant that is expected to start production soon," another source said.

Queries sent to the Ministry of Electronics and IT and Micron did not elicit any immediate reply.