Micron to get $6 billion from govt for domestic chip factories, aims to bring production back to US soil

The award, which isn’t yet finalized, could be announced as soon as next week, according to people familiar with the matter. It’s not clear whether the company also plans to accept loans available through the 2022 Chips and Science Act in addition to the direct grant funding. 

Micron, based in Boise, Idaho, is building factories in New York and its home state. After the preliminary agreement is announced, the firm would enter months of due diligence and then receive the money in tranches tied to project-specific benchmarks.

Representatives for Micron, the Commerce Department and the White House declined to comment.

The Chips Act set aside $39 billion for direct grants, as well as loans and loan guarantees worth $75 billion, to revitalize American chipmaking after decades of production shifting to Asia. Officials have unveiled six preliminary awards so far: three to firms that produce older-generation semiconductors, plus multibillion-dollar packages for Intel Corp., Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. 

Commerce Secretary Gina Raimondo has said the agency plans to spend about $28 billion of the grant funding on leading-edge projects.

Micron has pledged to build as many as four factories in New York state, plus one in Idaho. But those plans “require Micron to receive the combination of sufficient Chips grants, investment tax credits and local incentives to address the cost difference compared to overseas expansion,” Chief Executive Officer Sanjay Mehrotra said last month. The company is proceeding with projects in China, India and Japan as well.

Raimondo has said that her agency will prioritize funding projects that begin production by the end of the decade. Two of Micron’s four New York sites are on track to meet that benchmark, while the other two won’t be operational until 2041, the company said in a recent federal filing. That means that Micron’s award is likely to support only the first two New York facilities, people familiar with the matter said earlier. 

Computer memory and storage chips are a vital part of everything from smartphones to the biggest data centers, where they store information and help advanced logic process information. Production is primarily done in Asia. Micron’s biggest two competitors, Samsung and SK Hynix Inc., account for the majority of that manufacturing.

Those firms also plan to build factories in the US — for logic chips and advanced packaging, respectively — as part of a groundswell of more than $200 billion in private semiconductor investment spurred by the Chips Act.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Published: 18 Apr 2024, 06:32 AM IST