micron lands historic $6.14 billion chip subsidy
Boise, Tuesday, 10 December 2024.
Micron Technology has secured a monumental $6.14 billion subsidy from the US government under the CHIPS Act. This funding aims to bolster domestic chip manufacturing with new facilities in New York and Idaho. The investment is part of Micron’s long-term strategy, contributing to a broader $125 billion initiative over two decades. The subsidy is among the largest awarded to chip manufacturers and is expected to create about 20,000 jobs by the end of the decade. Additionally, $275 million has been allocated for expanding Micron’s facility in Virginia, enhancing domestic production capabilities crucial to defense and automotive sectors. This move is part of a wider effort by the Biden administration to reduce reliance on Asian supply chains and strengthen US technological infrastructure. The timing of this announcement, before President-elect Donald Trump takes office, underscores its significance in shaping future US semiconductor policies.
Market impact and stock performance
Micron’s stock showed a modest reaction to the subsidy announcement, with shares declining less than 1% in Tuesday’s trading [3]. The $6.165 billion funding package, split between $4.6 billion for New York and $1.5 billion for Idaho operations [3], represents a significant government commitment to domestic semiconductor production. This investment aligns with Micron’s ambitious expansion plans, including a 1,400-acre mega campus for DRAM chip production in New York [3].
Strategic manufacturing goals
The investment aims to dramatically increase US market share in advanced memory chip manufacturing from current levels below 2% to approximately 10% by 2035 [3]. This expansion focuses particularly on DRAM and High-Bandwidth Memory production, critical components for AI development and computing applications [3]. The initiative addresses a significant decline in US semiconductor manufacturing capacity, which dropped from 37% in 1990 to 12% in 2020 [1][2].
Political and economic implications
The timing of this finalization is significant, coming just weeks before the presidential transition [3][4]. While the CHIPS Act enjoys bipartisan support, President-elect Trump has criticized the subsidy approach, preferring tariffs on foreign manufacturers [1][2]. The agreement includes provisions for approximately 20,000 new jobs [5], making it a significant economic driver for the regions involved.