Micron enters PMT for $6.1B in funding to support U.S. memory manufacturing

Micron and the Biden-Harris Administration announced that they have signed a non-binding preliminary memorandum of terms, or PMT, for $6.1B in funding under the CHIPS and Science Act to support memory manufacturing in Idaho and New York. The CHIPS and Science Act grants of $6.1B will support Micron’s plans to invest approximately $50B in gross capex for U.S. domestic leading-edge memory manufacturing through 2030. These grants and additional state and local incentives will support the construction of one memory manufacturing fab to be co-located with the company’s existing R&D facility in Boise, Idaho and the construction of two memory fabs in Clay, New York. The investments announced represent the first step toward Micron’s vision of both a R&D and manufacturing center in Boise, Idaho and a four-fab manufacturing complex in Clay, New York to be built over the next 20-plus years with potential investment totaling up to $125B. These investments will support Micron’s objective to grow its memory bit supply in line with long-term industry bit demand growth. Micron retains flexibility under the PMT to remain responsive to market conditions over time. In addition to the announced $6.1B in grants, workforce grants to support Micron’s efforts to build a vibrant talent pipeline are also being finalized. In addition to the CHIPS grants, Micron expects to benefit from the U.S. Treasury Department’s Investment Tax Credit, which provides a credit of 25% for qualified capital investments. The state of New York has made up to $5.5B available in incentives over the life of the project, comprised of a 5% New York investment tax credit on qualified capital investments and 7.5% of eligible non-construction labor costs. Micron and the state of New York also established the Green CHIPS Community Investment Fund to support community and workforce development in the region. The company 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. These federal and state incentives, combined with projected power cost advantages, along with R&D and manufacturing co-location synergies, enable Micron to achieve cost-competitive memory manufacturing in the U.S. Micron’s planned semiconductor manufacturing facilities are expected to create approximately 75,000 domestic jobs over the next 20-plus years. In Idaho, this includes 2,000 Micron jobs, 4,500 construction jobs and 15,000 indirect jobs. In New York, this includes 9,000 Micron jobs, 4,500 construction jobs and 40,000 indirect jobs. The two projects, as planned, will represent the single largest private investments ever made in the states of Idaho and New York. Micron’s Idaho fab and two New York fabs are expected to help the U.S. grow its share of advanced memory manufacturing from less than 2% today to approximately 10% by calendar year 2035. Micron initiated construction on its Boise fab in October of calendar year 2023. The fab will be co-located with Micron’s world-class R&D center to enhance operational efficiency, accelerate technology deployment and improve time to market for leading-edge products. The Idaho fab is expected to come online and be operational in calendar year 2025, with DRAM output starting in calendar year 2026 and ramping in line with market demand over the second half of the decade. In New York, preliminary design, field studies and permitting applications, including NEPA, are underway for the project. Construction of the first fab is expected to begin in calendar year 2025 and to come online and contribute to output in calendar year 2028, ramping in line with market demand over the next decade. In addition to the Idaho and New York projects, Micron has submitted an application under the CHIPS program to the Department of Commerce to modernize its Manassas, Virginia fab for the production of long-lifecycle chips to support customer demand in areas such as automotive, industrial, aerospace and defense. The PMT provides that the award is subject to due diligence and the negotiation and signing of a definitive agreement with the Department of Commerce, and the disbursement of funds will be conditioned upon the achievement of certain milestones and other requirements. The additional terms of the agreement remain confidential.