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U.S. chipmaker Micron Technology is set to receive more than $13 billion in government funding and loans to help build memory chip factories in New York and Idaho as the Biden administration seeks to shift supply chains away from Asia.
The tentative agreement, which includes $6.1 billion in direct financing and up to $7.5 billion in loans, falls under the Chips Act of 2022. In recent weeks, funding packages have been announced for Intel, TSMC and Samsung announced.
President Joe Biden will be in Syracuse, New York, on Thursday to announce the U.S. chip sector’s latest support package, this time focused on the production of cutting-edge memory chips known as dram.
The funds will go toward two new manufacturing facilities in Clay, New York, and a facility in Boise, Idaho, where Micron is headquartered. Under the agreement, Micron plans to invest up to $125 billion in both states over the next two decades.
The Boise plant under construction is expected to begin chip production in 2026, while the two New York factories will come online in 2028 and 2029, respectively, senior U.S. government officials said.
Micron shares have risen more than 30 percent since the beginning of the year. The company reported better-than-expected sales in March and posted a profit for the first time in 18 months, driven by soaring demand for AI products.
Micron’s latest HBM3E memory chips are integrated into Nvidia’s H200 GPUs, which power the data centers behind new generative AI products. It is also one of Apple’s smartphone memory chip suppliers.
South Korean company SK Hynix, one of Micron’s main competitors in the memory chip market, announced this month that it is investing about $4 billion in an advanced AI chip packaging facility in Indiana in collaboration with Purdue University.
Democrats have rallied to boost Biden’s weak economic approval ratings and prepare for an election that could hinge on the candidates’ ability to strengthen American industry and reduce dependence on rival powers such as China.
The Biden administration aims to have 20 percent of the world’s leading chips made in the United States by the end of the decade as it seeks to shift manufacturing of critical chips from Asia. Most of the world’s most advanced chips are manufactured by TSMC of Taiwan.
Micron was previously caught in the middle of the geopolitical rivalry between the US and China. In May 2023, the company was sanctioned by China’s Cyberspace Administration, which banned key infrastructure operators from using its chips for security reasons.
The move came a day after Biden and G7 leaders rebuked China over its economic policies and increasing military assertiveness in the East and South China Seas.
“This means the federal government is taking the reins again and walking the talk when we say we want the future of technology to be “Made in America,” said Chuck Schumer, the House Majority Leader Senate Democrats representing New York.
“This will help support businesses, education institutions and unions to build a pipeline of workers and thousands of good-paying jobs.”