The Biden administration will give Micron up to $6.1 billion in grants to help build its semiconductor plants in New York and Idaho, the latest multibillion-dollar award aimed at boosting production of critical semiconductors in the country.
Senator Chuck Schumer, Democrat of New York and majority leader, announced the grant on Thursday and said the “significant” investment would help the company build two new chip manufacturing plants as well as another in New York by the end of the decade. under construction In idaho.
More than a year ago, Micron announced plans to expand its manufacturing footprint in the United States. In September 2022, the company said it would build a $15 billion factory in its hometown of Boise, Idaho, which would be the first new US memory chip plant in 20 years. A month later, Micron said it would build a massive manufacturing complex near Syracuse, NY, promising to break ground on the $20 billion project by the end of the decade and spend up to $100 billion over the next two decades or more. The complex could eventually include four new manufacturing plants.
A senior Biden administration official confirmed the award and said it would help create thousands of jobs. Company officials have said the investment is expected to create about 50,000 jobs, including about 9,000 direct positions at its plants.
The announcement is the latest reward from federal officials to chipmakers in recent weeks. The funding comes from the CHIPS Act, which a bipartisan group of lawmakers passed in 2022 to reestablish the United States as a leader in the production of semiconductors, the fundamental components that power everything from phones and supercomputers. Powering everything from cars to weapons systems. Equipped with $39 billion, the Commerce Department has distributed several grants as incentives to chip makers to build and expand facilities in the United States.
The initiative aims to strengthen the domestic supply of semiconductors. Although semiconductors were invented in the US, manufacturing has largely moved overseas. Currently only 10 percent of the world's semiconductors are made in the United States.
Micron's award brings total announced grants to more than $29 billion. On Monday, US officials gave Samsung a grant of up to $6.4 billion. Other major chipmakers, including Taiwan Semiconductor Manufacturing Co. and Intel, have also received recent awards. GlobalFoundries, Microchip Technology and BAE Systems received the first three awards.
Mr. Schumer, who helped rally Congress to pass the CHIPS Act, said Micron's award would help ensure that “America is no longer dependent on other countries for all kinds of critical chips.” He said he had long pressed for Micron to receive a share of the federal grants.
“I have always lobbied heavily to benefit New York and have spoken to the administration on numerous occasions about how important Micron is to the entire country,” Mr. Schumer said in an interview. “But to be honest, my advocacy for chips extends to the entire country.”
Mr Schumer said the award would help boost the country's production of critical memory chips, on which the country is becoming “more and more dependent”.
Micron declined to comment, citing confidentiality requirements associated with the CHIPS Act grant.
Based in Boise, Micron is the last U.S. supplier of chips called dynamic random access memory, or DRAM. Components play an important role in computers and smartphones, acting like scratchpads to temporarily store data that must be retrieved repeatedly. Micron also has a major feature in flash memory, a new variety of chips that store data more permanently.
The DRAM business was a major global battleground in the 1980s and 1990s, as companies in Japan and later South Korea used manufacturing muscle to drive down prices and squeeze out competitors. Many large American companies like Intel and Texas Instruments went out of business.
Micron, a much smaller company, managed to survive as the industry became limited to only three major players. South Korean companies Samsung and SK Hynix rank first and second respectively in memory revenue. Less competition has helped moderate the industry's business cycle to some extent, although all three companies faced severe pricing pressure last year.
DRAM and flash memory are the mainstay of computers found in data centers, as new applications require greater amounts of data and faster access to it. In the latest problem, makers of specialized chips for artificial intelligence such as Nvidia rely on a technology called high-bandwidth memory, which bundles multiple stacks of DRAM chips into a package with the processor doing the calculations.
Micron, although largely managed through offices in San Jose, California, has most of its manufacturing in Taiwan, Japan, and Singapore. Chief Executive Sanjay Mehrotra has led an effort to rapidly expand its U.S. production footprint and secure government subsidies for that expansion.
But Mr Mehrotra reiterated that the timing of such spending would closely track the supply and demand situation in the memory market, and would also reflect the company's success in winning US grants.
Mr. Schumer said Micron is also expected to claim federal tax credits that could cover 25 percent of the cost of building factories and equipping them with production equipment.