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HomeBusinessBiden-Harris Administration Announces Preliminary Terms with Micron to Onshore Leading-Edge Memory Chip...

Biden-Harris Administration Announces Preliminary Terms with Micron to Onshore Leading-Edge Memory Chip Production in U.S. for First Time in Decades

U.S. Department of Commerce Proposes up to Roughly $6.14 Billion for Micron to Expand Domestic DRAM Chip Production in Idaho and New York

Micron’s Full Vision Would Create Approximately 20,000 Jobs and Catalyze up to $125 Billion in Private Capital Over Two Decades, Including Commitments of $50 Billion in Capex Over Next Six Years

Today, the Biden-Harris Administration announced that the U.S. Department of Commerce and Micron Technology have signed a non-binding preliminary memorandum of terms (PMT) to provide up to roughly $6.14 billion in direct funding under the CHIPS and Science Act to boost U.S. competitiveness in leading-edge memory semiconductor production. The proposed funding would support the construction of two leading-edge Dynamic Random-Access Memory (DRAM) fabs in New York, the first step in Micron’s two-decade vision to invest approximately $100 billion in New York and create roughly 13,500 facility and construction jobs. In addition, the proposed funding would unlock a $25 billion investment in a DRAM fab in Idaho, which will be co-located with Micron’s R&D facilities in Boise and create approximately 6,500 facility and construction jobs. Together, these investments would advance the company’s plans to onshore approximately 40% of their DRAM chip production over the next two decades.

“Leading-edge memory chips are foundational to all advanced technologies, and thanks to President Biden’s leadership, America is rebuilding its capacity to produce these critical capabilities for the first time in almost two decades,” said U.S. Secretary of Commerce Gina Raimondo. “With this proposed investment, we are working to deliver on one of the core objectives of President Biden’s CHIPS program – onshoring the development and production of the most advanced memory semiconductor technology which is crucial for safeguarding our leadership on artificial intelligence and protecting our economic and national security. With these proposed investments, coupled with Micron’s historic private investment of up to $125 billion in New York and Idaho over the next 20 years, President Biden is working to revitalize U.S. technological leadership and creating tens of thousands of good-paying jobs.”

Micron is widely recognized as a global leader in leading-edge DRAM technology and production and is the only U.S.-based manufacturer of memory chips. Currently, all leading-edge DRAM chip manufacturing takes place in East Asia, but through this proposed investment in Micron, the Biden-Harris Administration would help strengthen U.S. economic and national security by bolstering a reliable domestic supply of the leading-edge DRAM chips that are important components for advanced technologies, such as wireless communications, personal computing, high-performance compute, automotive, and AI. Micron’s technology will also enable the highest-performance memory, known as High-Bandwidth Memory, which is critical for enabling new AI models. Through its investments in its New York and Idaho fabs, Micron will attract key suppliers to the United States, further strengthening U.S. supply chain resilience.

“Thanks to President Biden’s historic CHIPS and Science Act, today’s announcement is a meaningful step forward in America’s leadership in semiconductor development and manufacturing,” said Deputy Secretary of Commerce Don Graves. “Micron’s investments in New York and Idaho will be crucial to constructing high-volume manufacturing fabs, establishing our country as a global leader in the leading-edge semiconductor market, and helping to write the next chapter of economic prosperity in America.” 

“Our ability to research and develop the next generations of artificial intelligence, wireless communications, and many more advanced technologies depend on leading-edge DRAM chips,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “Thanks to this proposed CHIPS investment, Micron’s leading-edge R&D facility in Boise, Idaho, will develop and produce the most advanced DRAM technology nodes while their planned megafab in New York will produce the chips at high volumes—creating a robust domestic leading-edge memory supply chain that would help make the United States a global leader in memory technology.” 

“This is a historic moment for semiconductor manufacturing in the U.S.,” said Micron President and CEO Sanjay Mehrotra. “Micron’s leading-edge memory is foundational to meeting the growing demands of artificial intelligence, and we are proud to be making significant memory manufacturing investments in the U.S., which will create many high-tech jobs. We appreciate the foresight of U.S. President Joe Biden, U.S. Secretary of Commerce Gina Raimondo, U.S. Senate Majority Leader Chuck Schumer and the bipartisan delegation in Congress that supported the CHIPS and Science Act. Their steadfast focus championing these strategic investments will ensure U.S. semiconductor competitiveness for generations to come.”

The proposed CHIPS investment would create a robust leading-edge DRAM chip ecosystem in the United States by supporting projects in Idaho and New York:

  • Clay, New York: Construct first two fabs of planned four fab “megafab” focused on leading-edge DRAM chip production. Each fab will have 600,000 square feet of cleanrooms, totaling 2.4 million square feet of cleanroom space across the four facilities—the largest amount of cleanroom space ever announced in the United States and the size of nearly 40 football fields.
  • Boise, Idaho: Develop a high-volume manufacturing (HVM) fab, with approximately 600,000 square feet of cleanroom space focused on the production of leading-edge DRAM chips. The fab would be co-located with the company’s R&D facility to improve efficiency across their R&D and manufacturing operations, reducing lags in technology transfer and cutting time-to-market for leading-edge memory products.

Micron is committing to spend $50 billion toward the development of their first three fabs over the next six years, spurring community revitalization and ecosystem development across the country. Over two decades, these projects are expected to create over 9,000 manufacturing and facility jobs and 4,500 construction jobs in New York, and over 2,000 manufacturing and facility jobs and 4,500 construction jobs in Idaho. Micron’s projects will operate under Project Labor Agreements (PLA) in New York and Idaho. Both PLAs emphasize workforce training through registered apprenticeships and hiring veterans and local workers. For example, the New York PLA includes a partnership with a local pre-apprenticeship program, which will prepare a diverse workforce for entry into construction trades, and the Idaho PLA includes measures to increase construction work by underserved communities.

The PMT includes at least $40 million in proposed dedicated workforce funding to help Micron – an industry leader in workforce development – secure the highly skilled workforce it needs to build and operate these fabs. As part of its commitment to developing a robust local talent pipeline in New York, Micron has forged strong partnerships with local communities, universities, and community colleges – including Syracuse University and Onondaga Community College (OCC) in New York, and College of Western Idaho (CWI) and Boise State University in Idaho – to train and recruit its manufacturing workforce. These partnerships have enabled Micron to launch its first-ever Registered Apprenticeship Program in Idaho in collaboration with CWI and the Idaho Manufacturing Alliance. This program currently supports 21 active apprentices ranging from recent high school graduates to adults switching industries. Scaling this program, Micron will partner with the Manufacturer’s Association of Central New York and surrounding education providers, including OCC, to design and launch a Registered Apprenticeship program in New York to support workforce needs.

Micron is also working with the American Federation of Teachers (AFT) and its affiliates the New York State United Teachers and the United Federation of Teachers to help students get ready for the thousands of new technical careers in the semiconductor industry by piloting a curricular framework, teacher training, and work-based learning opportunities in 10 New York districts. After piloting the framework, it will be made widely accessible – enabling other communities to scale this program that supports the alignments of education and workforce development programs, starting with K-12 students.

Micron is committed to providing accessible, affordable, reliable, and high-quality child care options for its workforce. In Boise, Idaho, Micron will be opening a near-site 124-seat child care center to families in September of 2024, which will be run by the YMCA, to help bolster child care availability in the region. Similarly, in New York, Micron is in the early-stage processes of planning a new facility for employees. Across both locations, the company provides a wide set of child care offerings, including backup care, care-navigation tools, including for home based and non-traditional hour care, via their local Child Care Resource and Referral partnerships, as well as a Dependent Care Flexible Spend Account.

Micron will design and operate their New York megafab according to their sustainability framework and commitments while using green infrastructure during the construction of the fabs. Micron also plans to use 100% renewable electricity and mitigate greenhouse gases with the goal of net-zero emissions by 2050.

In addition to the proposed direct funding, the CHIPS Program Office would make up to $7.5 billion of proposed loans – which is part of the $75 billion in loan authority provided by the CHIPS and Science Act – available to Micron under the PMT. New York State has also committed to providing $5.5 billion in incentives for Micron’s project in Clay, New York. Additionally, Micron has worked with New York State to create the Green CHIPS Community Investment Fund that will invest $500 million, including $250 million from Micron, in community and workforce development over the duration of the project. In Idaho, Micron has signed a Community Investment Framework alongside the state and city of Boise, and the company has committed $75 million over the next 10 years toward workforce development and community priorities. Micron will also benefit from an incentive package in the state of Idaho, including reduced state taxes related to the project and substantial investments in semiconductor workforce training programs. The company has also indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of a long-form term sheet and award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in the long-form term sheet and the final award documents may differ from the terms of the PMT being announced today.

 

About CHIPS for America

The Department has received more than 640 statements of interest, more than 190 pre-applications and full applications for NOFO 1, and more than 160 small supplier concept plans for NOFO 2. The Department is continuing to conduct rigorous evaluation of applications to determine which projects will advance U.S. national and economic security, attract more private capital, and deliver other economic benefits to the country. The announcement with Micron is the seventh PMT announcement the Department of Commerce has made under the CHIPS and Science Act, with additional PMT announcements expected to follow throughout 2024.  

CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted. Visit www.chips.gov to learn more. 

Originally posted at https://www.commerce.gov/news/press-releases/2024/04/biden-harris-administration-announces-preliminary-terms-micron-onshore

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