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US Government Backs Micron with Massive $6.1B for Chip Manufacturing

Daniel Kim Views  

Micron Technology, a memory chip manufacturer, is set to receive subsidies from the U.S. government.

On the 25th (local time), the U.S. government announced that it plans to provide $6.1 billion in subsidies and up to $7.5 billion in loans to aid the construction of Micron Technology’s new U.S. factory as part of a significant federal subsidy for advanced semiconductor manufacturing.

Chuck Schumer, the Democratic Majority Leader of the Senate in New York, disclosed the expectation of $6.1 billion to bring Micron back to the U.S. as a leading-edge memory manufacturer before the announcement, adding the government cannot allow chips to be produced overseas and made by competitors like China.

According to the Department of Commerce, Micron’s project is expected to create 20,000 jobs in construction and manufacturing.

Furthermore, Micron has signed labor agreements with construction unions in New York and Idaho, and the CHIPS Act subsidy has specifically allocated $40 million for workforce recruitment.

Micron is constructing a factory with plans to start production in 2026 using funds from headquarters in Boise.

In addition, two more factories are being built in the Syracuse area of New York, scheduled to begin operations in 2028 and 2029. Plans are also underway for two facilities in New York that are not included in the preliminary agreement.

Micron operates factories in Singapore, Japan, and Taiwan as well.

With U.S. funding support, Micron is believed to have secured its first advanced manufacturing expansion in the U.S. in over twenty years.

However, such expansion carries risks for Micron as memory chips are designed to industry standards, which means they have high price volatility and form a commodity market due to their interchangeability.

Micron’s history is characterized by drastic fluctuations between shortage and excess, making it difficult to maintain consistent profits. One year after posting substantial profits, Micron reported a net loss of over $5 billion last year.

Recently, the U.S. has provided $27.6 billion in subsidies to the four advanced manufacturers installed in the U.S., namely Micron, Intel Corporation, Taiwan Semiconductor, and Samsung Electronics. South Korea’s SK Hynix also pledged to build packaging facilities in the U.S.

This means that the U.S. will be the only country in the world to host facilities operated by the world’s top manufacturers.

Daniel Kim
content@viewusglobal.com

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