Micron to Invest $40B in U.S. with Passage of CHIPS Act

Article By : Alan Patterson

In a bid to reshore the American semiconductor industry, Micron plans to invest $40 billion in expansion in the United States with the passage of the U.S. CHIPS and Science Act.

Micron, the world’s third–largest memory chipmaker, said today it plans to invest $40 billion in expansion in the United States with the passage of the U.S. CHIPS and Science Act.

“CHIPS” stands for “Creating Helpful Incentives to Produce Semiconductors,” but the act goes beyond computer components.

U.S. President Joe Biden is expected to sign the act today, which will provide about $52 billion in subsidies and research grants to semiconductor companies that invest in the nation and limit their expansion in China.

“As a result of this major legislative milestone, Micron is announcing our commitment to invest $40 billion in leading–edge memory manufacturing through the end of the decade—the largest memory investment ever made in the U.S.,” Micron CEO Sanjay Mehrotra said in a press statement. “Thanks to the anticipated grants and credits made possible by the CHIPS and Science Act, Micron can now move toward this significant, long–term investment plan with confidence.”

The act has attracted other multi–billion dollar investments in the U.S. by the world’s leading chipmakers, including Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung, and Intel. As the U.S. share of global semiconductor production has dwindled, political leaders and chip industry associations have sought to reshore the industry that’s a fundamental part of critical manufacturing processes, from automobiles to weapons systems.

The U.S. today accounts for about 12% of the world’s chip production, while more than two–thirds are produced in Asian nations like Taiwan, South Korea, and China. Starting with the administration of former President Donald Trump, the U.S. has treated China as a “strategic adversary” in growing new businesses like 5G, AI, and space exploration.

Boise, Idaho–based Micron, which didn’t name a specific location for the $40 billion investment, said it will provide details in coming weeks.

Micron facility in Boise, Idaho (Source: Shutterstock)

“The investments we are planning in the U.S. will create up to 40,000 new American jobs, including approximately 5,000 highly paid technical and operational roles at Micron,” Mehrotra said. “It will bring the most advanced memory to the most sophisticated technology solutions, which will now be proudly labeled ‘made in America’.”

Micron does the bulk of its production in Taiwan and China.

Automotive and industrial applications will be the fastest–growing memory and storage markets for Micron over the next decade, according to the company.

Samsung and SK Hynix of South Korea are Micron’s larger competitors. The three companies dominate the memory chip business, but face new competition from rivals in China such as Yangtze Memory Technologies Co. (YMTC).

U.S. President Joe Biden’s administration has continued a technology war with China that started under former President Donald Trump, blacklisting companies such as Huawei and Semiconductor Manufacturing International Corp. (SMIC). The CHIPS and Science Act is aimed at boosting U.S. competitiveness with China and building a more secure domestic supply chain.

“The CHIPS and Science Act is an important first step toward strengthening and retaining American technology leadership for decades to come,” Mehrotra said. “Today, only one out of every 50 memory chips is made domestically, and all that domestic production comes from a Micron fab.”

The company pledged to produce one out of every 10 memory chips in the U.S. within the next decade.

“This has profound national security implications, as it ensures a secure supply chain and creates a more reliable, dependable supply of semiconductors,” Mehrotra said.

Micron in recent years halted expansion to control cost and shift investment to improvements in existing cleanroom facilities.

The company announced in 2021 a plan to invest $150 billion over 10 years in manufacturing and R&D on a global basis. Micron today didn’t provide details on how passage of the CHIPS and Science Act will impact the earlier plan.

In April 2022, Micron said that during 2025–2026, it would add new wafer capacity for DRAM to meet demand up to 2030. Leading chipmakers like TSMC, Samsung, and Intel are investing record amounts in expansion to meet demand that has exceeded supply for more than two years.

“The manufacturing investments we are planning are necessary to meet long–term market demand,” Mehrotra said. “Soon, the U.S. will once again be home to the world’s most advanced memory manufacturing. We are truly thrilled to be part of this new era.”

This article was originally published on EE Times.

Alan Patterson has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.

 

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