Biden administration awards $6.1 billion subsidy from US Chips Act for Micron’s Idaho and and New York plants
The US Commerce Department has announced a huge funding package for the only American memory maker, in one of the last moves of the outgoing Biden administration.
On Tuesday the Department of Commerce announced it has awarded “CHIPS incentives to Micron for Idaho and New York projects, and announces preliminary memorandum of terms for Virginia DRAM project to secure domestic supply of legacy memory chips.”
Micron is an American producer of computer memory and computer data storage media, and has a presence in four locations in Taiwan and is considered to be a rival to China’s memory maker Yangtze Memory Technologies Co (YMTC).
US funding
This competition with China was highlighted in April 2023, when Chinese regulators launched an investigation into Micron and banned its products from critical infrastructure in a move widely seen as retaliation for the US adding YMTC to the Entity List blacklist in December 2022.
Micron in recent years has pledged to expand its US facilities.
In September 2022 for example Micron broke ground for a $15 billion (£13bn) memory chip plant in Boise, Idaho, part of a plan to invest $40bn in US semiconductor manufacturing through the end of the decade.
Planned Micron semiconductor plant in Boise, Idaho. Image credit: Micron
Then in October 2022 Micron Technology said it would construct a “sustainably built and operated, leading-edge memory fab in New York.
Now the Biden administration announced that the US Department of Commerce has awarded Micron Technology up to $6.165 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities.
The award follows the previously signed preliminary memorandum announced on 25 April 2024, and the completion of the Department’s due diligence.
This funding will support the first step in Micron’s two-decade vision to invest approximately $100 billion in New York and $25 billion in Idaho, which will create approximately 20,000 jobs and will help the US grow its share of advanced memory manufacturing from less than 2 percent today to approximately 10 percent by 2035.
The Department will disburse the funds based on Micron’s completion of project milestones.
Onshoring production
In addition, the Department of Commerce has signed a non-binding Preliminary Memorandum of Terms (PMT) with Micron Technology for up to $275 million in proposed funding to expand and modernise its facility in Manassas, Virginia.
The expected capital expenditure for the modernisation will be $2 billion over the next several years.
“Memory chips are foundational to all advanced technologies, and thanks to the bipartisan CHIPS and Science Act, America is rebuilding its capacity to produce these critical capabilities, said US Secretary of Commerce Gina Raimondo.
US Secretary of Commerce Gina M. Raimondo. Image credit US Government
“With this investment in Micron, we are delivering on one of the core objectives of the CHIPS program – onshoring the development and production of the most advanced memory semiconductor technology, which is crucial for safeguarding our leadership on artificial intelligence and protecting our economic and national security,” said Raimondo.
“As the only US-based manufacturer of memory, Micron is uniquely positioned to bring leading-edge memory manufacturing to the US, strengthening the country’s technology leadership and fostering advanced innovation,” added Micron President and CEO Sanjay Mehrotra.
“Micron’s investments in domestic semiconductor manufacturing capabilities, supported by the bipartisan CHIPS Act, will help drive economic growth and ensure that the US remains at the forefront of technological advancements,” said Mehrotra.
US Chips Act
There is little doubt that Micron’s investment plan in the US was spurred by the Chips and Science Act signed into law in August 2022, which provides $52.7 billion to support domestic semiconductor manufacturing.
The US law was spurred by the severe chip shortages during the Covid-19 pandemic of 2020 and 2021.
Indeed, the US Chips Act is expected to help the US to more than triple its domestic chip manufacturing capacity and to control nearly 30 percent of advanced chipmaking by 2032, while China is estimated to manufacture only 2 percent of the most advanced chips.
In October President Joe Biden signed a new law so that semiconductor factories in the US receiving funding as part of the US CHIPS Act, will not be subject to additional federal environmental reviews.
Then in November the US Commerce Department finalised $6.6 billion (£5.2bn) in direct funding to Taiwanese chip manufacturer TSMC to build three greenfield leading-edge plants in Arizona.
