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Micron will receive $6.1 billion to build semiconductor plants| GuyWhoKnowsThings

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 grant aimed at increasing domestic production of vital semiconductors.

Senator Chuck Schumer, Democrat of New York and the majority leader, announced the grant on Thursday and said the “monumental” investment would help the company build two new chip manufacturing plants in New York by the end of the decade. along with another plant. 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, the first new memory chip plant in the United States in 20 years. A month later, Micron said it would build a giant industrial complex near Syracuse, New York, promising to start with a $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 include up to 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 approximately 50,000 jobs, including about 9,000 direct positions at its plants.

The announcement is the latest award given by federal officials to chipmakers in recent weeks. The financing 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 critical components that power everything from phones and supercomputers to automobiles and weapons systems. Endowed with $39 billion, the Commerce Department has distributed several grants to chipmakers as an incentive for them 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 United States, manufacturing has largely moved overseas. Currently only about 10 percent of the world's semiconductors are made in the United States.

Micron's award brings the total announced grants to more than $29 billion. On Monday, US officials Samsung awarded up to $6.4 billion in grants. Other major chipmakers, including Taiwan Semiconductor Manufacturing Company and Intel – They have also received awards recently. Global Foundries, microchip technology and BAE Systems received the first three prizes.

Mr. Schumer, who helped rally Congress to pass the CHIPS Act, said Micron's award would help ensure that “the United States is no longer dependent on other countries for all kinds of vital chips.” He said he had long pushed for Micron to receive a share of federal grants.

“I always pushed hard for New York to get an advantage and spoke to the administration on many occasions about the importance of Micron to the country as a whole,” Schumer said in an interview. “But frankly, my defense of chips extends to the entire country.”

Schumer said the award would help bolster domestic production of critical memory chips, on which the country is becoming “increasingly dependent.”

Micron declined to comment, citing confidentiality requirements associated with CHIPS Act grants.

Based in Boise, Micron is the latest U.S. supplier of chips called dynamic random access memory, or DRAM. The components play a vital role in computers and smartphones, acting like a notepad to temporarily store data that needs to be retrieved frequently. Micron also has a major side business in flash memory, a newer 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 their manufacturing muscle to drive down prices and squeeze out competitors. Much larger American companies, such as Intel and Texas Instruments, exited the business.

Micron, a much smaller company, managed to survive as the industry consolidated into just three major players. South Korean companies Samsung and SK Hynix rank first and second in memory revenue, respectively. Less competition has helped moderate the industry's business cycles to some extent, although all three companies came under severe pricing pressure last year.

DRAM and flash memory are mainstays of computers found in data centers, as new applications require larger amounts of data and faster access to it. In the latest development, makers of specialty AI chips like Nvidia are relying on a technology called high-bandwidth memory, which bundles multiple stacks of DRAM chips into packages along with processors that perform calculations.

Micron, although largely managed through offices in San Jose, California, does most of its manufacturing in Taiwan, Japan, and Singapore. Sanjay Mehrotra, the chief executive, has led an effort to dramatically increase its U.S. manufacturing footprint and secure government subsidies for that expansion.

But Mehrotra has reiterated that the timing of such spending would closely track supply and demand conditions in the memory market, and would also reflect the company's success in securing US subsidies.

Micron is also expected to claim federal tax credits that could cover 25 percent of the cost of building and equipping factories with production equipment, Schumer said.

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