(Bloomberg) — The U.S. plans to give Micron Technology Inc. $6.1 billion in grants and up to $7.5 billion in loans to help the memory chipmaker build new factories United States, completing a series of major federal awards for advanced semiconductor manufacturing. .
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Micron has committed to investing about $125 billion to build four factories in New York state and one in Idaho. The company — the largest U.S. memory chip maker — separately applied for federal funding to support a project in Virginia, according to documents filed last week.
“We’re bringing advanced chip manufacturing back to America after 40 years,” President Joe Biden said at an event in Syracuse, New York. “This will transform our semiconductor industry, a pillar of a modern economy, and it will create an entirely new ecosystem in advanced chip research, design and manufacturing here in America.”
Biden praised Micron CEO Sanjay Mehrotra for the company’s investments, joking that “we tried to lure you a little with a couple hundred billion dollars, but you came.” It seemed to work. He also attacked Republican lawmakers who opposed the federal law providing funds to expand domestic chip production.
“I guess they won’t be here today to celebrate,” Biden said.
Earlier: Micron to receive $6.1 billion in Chips Act money next week
It will still be months before Micron actually receives any funding from the Chips and Science Act of 2022, which included $39 billion in grants and $75 billion in loans to boost U.S. chip manufacturing and reduce reliance on with regard to Asia. Preliminary agreements like the one announced Thursday trigger a due diligence stage, after which the money will be distributed over time in tranches linked to construction and production criteria.
A factory already under construction in Boise, Micron’s headquarters, will receive funding and be ready to begin production in 2026. Two other factories in the Syracuse, New York area will be built and ready for manufacturing in 2028 and 2029. Micron also plans two other facilities in New York that are not covered by the scope of Thursday’s preliminary agreement.
Computer memory is an essential part of everything from smartphones to supercomputers, and works alongside processors made by companies such as Nvidia Corp. and Intel Corp. The funding award ensures that Micron will make its first advanced manufacturing expansion in the United States in more than 20 years. The company also has factories in Singapore, Japan and Taiwan.
But expansion carries risks for Micron. Memory chips have volatile prices because components are built to industry specifications. This means that they are interchangeable, resulting in a commodity-like market. Rapid fluctuations between shortages and gluts have characterized Micron’s history and made it difficult to achieve sustainable profitability. It recorded a net loss of…
