Biden, Seeking to Build on Fruitful Week, Will Announce Billions in Chip Grants

By Equipo
8 Min Read

President Biden, seeking to capitalize on a week of favorable political developments, plans to announce on Thursday that his administration will provide up to $6.1 billion in grants to Micron Technology, the latest federal award intended to shore up the nation’s domestic supply of semiconductors.

Micron will use the grants to help build two leading-edge chip manufacturing plants in New York and another facility in Idaho, Biden administration officials said before the president’s trip to Syracuse, N.Y., for the announcement. The federal government will also provide up to $7.5 billion in loans to Micron.

The funding stems from the CHIPS Act, which a bipartisan group of lawmakers passed in 2022 to re-establish the United States as a leader in the production of semiconductors, the tiny components that power everything from phones and computers to cars and fighter jets. The legislation gave the Commerce Department $39 billion to distribute as grants to incentivize chipmakers to construct and expand manufacturing plants across the United States.

Although the grant had been announced last week by Senator Chuck Schumer, Democrat of New York, Mr. Biden’s trip will give him a chance to celebrate another victory in what is shaping up to be a successful week for him. On Wednesday, he secured the endorsement of the North America’s Building Trades Unions, largely because of his bipartisan infrastructure package. He also is fresh off signing a $95.3 billion package of aid for Ukraine, Israel and Taiwan after months of congressional gridlock, reaffirming a central focus of his foreign policy agenda.

And while he is set to promote his efforts to bolster manufacturing in Syracuse, Mr. Biden’s Republican opponent in the 2024 election, former president Donald J. Trump, will be in court just 200 miles southeast, in New York City, as his state criminal trial on charges of falsifying business records continues.

Ramping up domestic chip production is a major goal for Mr. Biden, whose economic policy agenda largely focuses on strengthening American manufacturing and bringing back jobs that have shifted overseas in recent decades. Although semiconductors were invented in America, only about 10 percent of the world’s semiconductors are currently made in the United States, with the bulk manufactured in Asia.

More than a year ago, Micron announced plans to expand its manufacturing footprint in the United States. In October 2022, Micron said it would build a giant manufacturing complex near Syracuse, beginning with a $20 billion project by the end of the decade and spending as much as $100 billion over the next two decades or more. The month before, Micron said it would build a roughly $15 billion factory in its hometown, Boise, Idaho, the first new U.S. memory chip plant in 20 years.

As part of their new announcement, federal officials said that Micron now planned to spend $50 billion to develop the first three plants over the next six years, and that the company would invest up to $125 billion in the United States over the next 20 years or more. The company has said it could build up to four manufacturing plants in New York.

Micron’s award brings the total announced federal grants to more than $29 billion. Earlier this month, U.S. officials awarded Samsung up to $6.4 billion in grants. Other big chipmakers — including Taiwan Semiconductor Manufacturing Company and Intel — have also received awards recently. GlobalFoundries, Microchip Technology and BAE Systems received the first three awards.

Micron is also expected to claim federal tax credits that could cover 25 percent of the cost of building and outfitting factories with production equipment. The plant in Idaho is expected to be ready for production in 2026, senior Biden administration officials said. The first plant in New York is expected to open in 2028, with the second ready for production in 2029.

Federal officials said the grant would help stimulate Syracuse’s economy, billing it as part of Mr. Biden’s commitment to revitalize communities long ignored by federal investment.

Lael Brainard, the director of the president’s National Economic Council, said the region used to be a manufacturing hub around the time of World War II, when General Electric built products like radar systems for the military. But she said that decades of “trickle-down economics” resulted in the “loss of good jobs and less public and private investment.”

At least $40 million of the grant will be set aside for Micron to develop and train its work force. On Thursday, Mr. Biden is expected to announce the creation of four new “work force hubs” in upstate New York, Michigan, Milwaukee and Philadelphia. The hubs are for training and connecting workers to jobs created by new federal investments.

Mr. Schumer, who as Senate majority leader helped rally Congress to pass the CHIPS Act, said the award would help fortify the nation’s production of critical memory chips, which the United States is becoming “more and more dependent on.”

Micron is the last U.S. supplier of chips called dynamic random access memory, or DRAM. Those chips play a vital role in computers and smartphones, acting like a scratchpad to temporarily store data that must be retrieved frequently. Leading-edge DRAM chips are critical for advanced technologies like artificial intelligence and wireless communications. All such leading-edge chips are currently manufactured in Asia, but administration officials said Micron’s investments would allow the United States to produce its own supply.

Micron conducts most of its manufacturing in Taiwan, Japan and Singapore. Sanjay Mehrotra, the company’s chief executive, has made an effort to bolster its U.S. production and win government subsidies for that expansion. But Mr. Mehrotra has reiterated that the timing of such spending will closely track supply and demand, and reflect the company’s success in winning federal grants.

“This is a historic moment for semiconductor manufacturing in the U.S.,” Mr. Mehrotra said in a statement. “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.”

Don Clark contributed reporting from San Francisco.

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