Micron plans $40B in memory plants on heels of CHIPS Act

Micron Technology capitalized on the passage and presidential signing Tuesday of the CHIPS and Science Act with plans to invest $40 billion through 2029 to build leading-edge memory manufacturing in the U.S.

“With the anticipated grants and credits made possible by the CHIPS and Science Act, this investment will enable the world’s most advanced memory manufacturing in America,” Micron said in a statement on Tuesday.

Production will begin in the second half of the decade and ultimately produce up to 40,000 new American jobs including 5,000 highly paid technical and operational roles at Micron, the company said.

“The legislation will enable Micron to grow domestic production of memory from less than 2% to up to 10% of the global market in the next decade, making the U.S. home to the most advanced memory manufacturing and R&D in the world,” said Micron President and CEO Sanjay Mehrotra.

President Joe Biden signed the bipartisan CHIPS and Science Act of 2022 during a ceremony on the South Lawn of the White House.

The White House said in a statement that since the bill passed both chambers of Congress, a total of $50 billion has been committed by companies for additional chip manufacturing, including the $40 billion announced by Micron.

On Monday, Qualcomm and Global Foundries announced a multi-billion dollar revenue agreement to increase their global supply capacity reservation covering 5G transceivers, Wi-Fi, automotive and IoT Connectivity.  The White House said the partnership includes $4.2 billion to make chips in an expansion of the GF upstate New York Facility.  Qualcomm announced plans to increase chip production in the U.S. by up to 50% over five years, the White House added.

*“These companies see what I see that the future of the chip industry is going to be made in America,” Biden said on a White House signing ceremony Tuesday.

The bill provides $54.2 billion for U.S. semiconductor research, development, manufacturing and workforce development. That amount includes $39 billion for manufacturing grants and incentives, including $2 billion for legacy chips used in autos and defense systems and $13.2 billion in R&D and workforce development, according to a breakdown provided by the White House.

It also provides a 25% investment tax credit for capital expenses for manufacturing of chips and related equipment. 

President Biden said the bill, formally titled HR 4346, is “not a blind check to companies” and noted that companies will see grants revoked if they don’t live up to the terms of the bill , including providing union jobs to fab construction workers at prevailing rates.

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Despite criticism by some elected leaders that the bill is corporate welfare, it passed the Senate by 64-33 and the House by 243-187, giving the president a rare opportunity to declare a bipartisan victory amid a fractious time between Democrats and Republicans in Washington. On Sunday, the Senate approved the Inflation Reduction Act by 51-50 with Vice President Kamala Harris casting the deciding vote.

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The Biden-Harris Administration announced Tuesday a working group on permitting to act as a clearing house for best practices for project delivery to support implementation of the bill. Also, the President’s Council of Advisors on Science and Technology informed the president it is calling for development of a “chiplet platform” to enable startups to innovate at lower cost.  Their recommendations also call for building the first zettascale supercomputer offering speeds 1,000 times faster than any supercomputer in existence.  

The White House said the passage of the CHIPS Act spurred a response by companies to spend nearly $50 billion in additional chip manufacturing.  Micron is announcing $40 billion in memory chip manufacturing to bring the U.S. market share of memory chip product to 10%, up from less than 2% over the next decade.

Many other major chip companies have lobbied for the CHIPS Act over the last two years, as well as chip trade groups such as the Semiconductor Industry Association.  SIA and others have noted the U.S. produces about 10% of the world’s supply of chips and none of the most advanced ones, even as the U.S. invented the semiconductor.

President Biden has bemoaned the drop in federal government investment in overall R&D to less than 1% of GDP, down from a high of 2%.

Other features of the CHIPS Act:

--Establishes a technology and innovation directorate at the National Science Foundation to focus on chips and advanced computing. Reauthorizes research at the Department of Energy and National Institutes of Standards and Technology.

--Authorizes $10 billion for regional innovation and technology hubs across the country.

--Authorizes a $1 billion RECOMPETE pilot at the Department of Commerce to support long-term job creation in distressed communities.

--Authorizes new investments in STEM education and training from K-12 to community college, undergrade and graduate education.

--Authorizes investments to expand diversity in research institutions, including new initiatives to support Historically Black Colleges and Universities.  “The legislation also gives agencies and institutions the mission and the tools to combat sexual and gender-based harassment in the sciences, a demonstrated barrier to participation in STEM for too many Americans,” the White House statement says.