The US gives Micron $6.1 billion for American chip factories

Micron is expected to receive up to $6.1 billion in grants from the U.S. government to help build its semiconductor factories in New York and Idaho, the White House said Thursday.

The award, which President Joe Biden will announce as he travels to Syracuse, New York, is the latest in a series of efforts by Washington to bring semiconductor manufacturing back to the country.

The United States has been working to secure its lead in the chip industry, especially with regard to the development of artificial intelligence – both for national security reasons and in light of competition with China.

The investment will help Micron “bring manufacturing of advanced memory chips back to the United States for the first time in 20 years,” Senate Majority Leader Chuck Schumer of New York told reporters.

The $6.1 billion in direct funding comes under the CHIPS and Science Act, a major package of funding and tax incentives passed by Congress in 2022 to boost research and U.S. semiconductor manufacturing.

The White House said the money will go to support construction of two facilities in Clay, New York, and one in Boise, Idaho, where Micron is headquartered.

The U.S. Department of Commerce will also provide up to $7.5 billion in proposed loans under a preliminary agreement.

Micron will invest up to $125 billion in both states over the next 20 years “to build a leading memory manufacturing ecosystem,” the White House said.

The US chipmaker’s total investment is expected to create more than 70,000 jobs, including 20,000 direct jobs in the construction and manufacturing sectors.

Supply chain shocks

While semiconductors were invented in the United States, the White House noted that the country now makes only about 10 percent of the world’s chips — and “none of the most advanced.”

Micron CEO Sanjay Mehrotra called the move a “historic moment” for U.S. semiconductor manufacturing and said the U.S. investments “will create many high-tech jobs.”

“Leading-edge memory chips are the foundation for all advanced technologies,” said Commerce Secretary Gina Raimondo.

She added that returning the development and production of advanced memory semiconductor technology to the country “is critical to securing our leadership in artificial intelligence and protecting our economic and national security.”

Chips are needed to power everything from smartphones to fighter jets, and are in increasing demand for automakers, especially electric vehicles.

But the global chip industry is dominated by just a few companies, including Taiwan’s TSMC and California-based Nvidia.

The United States is dependent on Asia for chip production, making the country vulnerable to supply chain shocks, such as during the COVID-19 pandemic or in the event of a major geopolitical crisis.

“We are already seeing AI revolutionizing our world and growing at an unprecedented pace,” Schumer said.

“We can’t have these chips made abroad, especially by competitors like China. We can’t let them be the only supplier,” he added.

In addition to the grants to Micron, Biden is also expected to announce four new “workforce hubs” in the Upstate New York region, the state of Michigan and the cities of Philadelphia and Milwaukee.

According to senior government officials, such hubs are a way to encourage greater engagement from employers and educational institutions. (AFP)