Micron Considering New Memory Chip Factory in the United States as it Gears Up Spending
Micron Technology Inc., said on Wednesday, that it is exploring constructing a new memory plant in the United States, but that it will need state and federal incentives to offset higher costs than in Asia. Based in Boise, Idaho is the only American manufacturer of both types of memory chips, competing against South Korean companies Samsung Electronics Co Ltd and SK Hynix, and Toshiba's former memory chip unit, Kioxia.
Micron has pilot manufacturing lines at its Idaho headquarters and a factory in Virginia to develop new technologies that make specialised high-reliability chips for automobiles. But its most advanced memory chips, which go into devices including personal computers, phones, and data centres, are made in Taiwan, Japan, and Singapore. Micron's chief business officer Sumit Sadana stated that memory chips make up about 30% of the global semiconductor market, but only 2% are made in the United States.
In an interview, Sadana stated that the company first wants to evaluate manufacturing in the United States because the country needs more than 2% of memory manufacture for national security and supply chain resiliency. He further stated that the company has not decided on a location for its next advanced chip facility. However, extreme ultraviolet (EUV) lithography machines from ASML Holdings, which can cost more than USD 100 million each, will be needed in the factories.
Micron intends to invest up to USD 12 billion in capital expenditures and USD 3 billion in research and development activities in the coming year, with a total investment of up to USD 150 billion over the next decade. Micron predicts that memory manufacturing costs in the United States are 45% higher than in Asia. Sadana believes the decision will be influenced by whether the United States introduces manufacturing subsidies and investment tax credits for expensive tools, both of which are now being debated in Congress. The policies should be consistent and bipartisan.
