The Biden administration’s efforts to boost local chip production as tech rivalry between the US and China intensifies, is accelerating. Chip companies are announcing plans to build factories in different states in the US, thanks to the bipartisan CHIPS legislation aimed at promoting chip production on US soil.
On Tuesday, Micron said it would invest up to $100 billion over the next two decades to build a massive semiconductor factory in upstate New York. The move is one of the biggest underscores of increasing interest of semiconductor companies in expanding production on American soil.
Micron, based in Idaho, is the only American-based semiconductor firm. It said the factory, dubbed megafab, will be the “largest semiconductor fabrication facility in the history of the United States.” The proposed factory, which will be situated about 15 miles from Syracuse, is expected to create nearly 50,000 New York jobs over the next two decades, including approximately 9,000 high paying jobs.
“Micron’s New York megafab is part of its strategy to gradually increase American-made leading-edge DRAM production to 40% of the company’s global output over the next decade,” the company said in a statement. “Site preparation work will start in 2023, construction will begin in 2024 and production output will ramp in the latter half of the decade, gradually increasing in line with industry demand trends. Locating Micron’s industry-leading DRAM production in the U.S. brings tremendous benefits for its customers, enabling them to build their innovative products and solutions using a more resilient, secure and geographically diverse supply chain.”
Besides the tech rivalry between the US and China, the US’ push for more semiconductor production was bolstered by the global chip shortage, which came in the wake of covid-19, stymieing production across tech industry.
In August, President Joe Biden signed into law the CHIPS and Science Act. The aim is to boost American chip manufacturing with a more than $200 billion investment over the next five years. It is part of Washington’s push to make America a clear leader of the tech world as China moves closer to usurp American leadership.
The Chips and Science Act comes with a package that includes some $52 billion for chip manufacturing and research, aimed at providing companies incentives to build, expand and modernize US facilities and equipment – and especially to build chip factories on American soil.
This will minimize a US dependency on offshore chip production from Asia. The US manufacturers have been dependent on supplies from chipmakers such as the Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung – all Asia-based firms.
Micron President and CEO Sanjay Mehrotra expressed his gratitude for the swift bipartisan passage of the CHIPS and Science Act.
“I am grateful to President Biden and his Administration for making the CHIPS and Science Act a priority, to Senator Schumer and a bipartisan coalition in Congress for passing the legislation, and to Governor Hochul and County Executive McMahon for the local and state partnerships that made this investment possible.
“Micron will leverage the diverse, highly educated and skilled talent in New York as we look to build our workforce in the Empire State. This historic leading-edge memory megafab in Central New York will deliver benefits beyond the semiconductor industry by strengthening U.S. technology leadership as well as economic and national security, driving American innovation and competitiveness for decades to come,” he said.
Shares for Micron jumped nearly 5% Tuesday following the news.
Before the CHIPS and Science Act, other semiconductor companies such as TSMC and Intel had announced plans to build chip plants in the United States. The TSMC announced that it’s committing about $12 billion to build a semiconductor fabrication plant in Arizona, which is expected to begin production in 2024.
Also, Intel, counting on the CHIPS Act, announced plan to build a $20 billion semiconductor manufacturing plant in Ohio early in the year. The new plant, which its groundbreaking event was graced by Biden, kicked off in September.
Micron said it chose New York for the megafab because of its multiple advantages, including leading higher education institutions, access to talent traditionally underrepresented in technology jobs and a significant military population aligned with the company’s commitment to veteran hiring.
The Empire State has a long history of semiconductor development and manufacturing, which provides promising opportunities to collaborate on R&D initiatives with organizations like the Albany NanoTech Complex and the U.S. Air Force Research Laboratory.
In addition to megafab, Micron and the state of New York also announced a historic $500 million investment in community and workforce development with a focus on disadvantaged populations over the duration of the project. The firm said it will “invest $250 million over the next 20-plus years as part of the company’s commitment to the Green CHIPS Community Investment Fund.” It added that an additional $250 million is expected to be invested, with $100 million from New York and $150 million from local, other state and national partners.
Excited by Micron’s decision to make New York the host of the megafab, Governor Kathy Hochul said: “Micron’s $100 billion investment in New York marks the start of something transformative in scale and possibility for our state’s economic future. I promised that we would jump start the economy by being the most business-friendly and worker-friendly state in the nation, and thanks to our State Green CHIPS legislation, the federal CHIPS and Science Act, and extraordinary partnerships with business, labor, and local and federal leaders, this project will do exactly that.
“Together, we are leveraging this investment – the largest private-sector investment in state history – to secure our economic future, solidify New York’s standing as a global manufacturing hub, and usher the state into another Industrial Revolution.”