(Bloomberg) — Micron Technology Inc., the largest U.S. maker of computer memory chips, is poised to get more than $6 billion in grants from the Commerce Department to help pay for domestic factory projects, part of an effort to return semiconductor production to American soil.
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The price, which has not yet been finalized, could be announced next week, according to people familiar with the matter. It is not clear whether the company plans to accept loans available through the Chips and Science Act of 2022 in addition to the direct grant funding.
Micron, based in Boise, Idaho, is building factories in New York and its home state. After the preliminary agreement is announced, the company would conduct months of due diligence and then receive the money in tranches tied to project-specific benchmarks.
Representatives from Micron, the Commerce Department and the White House declined to comment.
The Chips Act set aside $39 billion for direct grants, as well as $75 billion in loans and loan guarantees, to revive U.S. chip manufacturing after decades of shifting production to Asia. Officials have announced six preliminary awards so far: three for companies that produce older-generation semiconductors, plus multibillion-dollar packages for Intel Corp., Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co.
Commerce Secretary Gina Raimondo has said the agency plans to spend about $28 billion of the grant funding on leading projects.
Read more: Advanced chip companies want $70 billion from US, says Raimondo
Micron has pledged to build as many as four factories in New York state, plus one in Idaho. But these plans “require Micron to receive the combination of sufficient Chip subsidies, investment tax credits and local incentives to address the cost differential compared to overseas expansion,” Chief Executive Officer Sanjay Mehrotra said last month. The company also carries out projects in China, India and Japan.
Raimondo has said her agency will prioritize funding for projects that begin production by the end of the decade. Two of Micron’s four New York facilities are on track to meet that standard, while the other two won’t be operational until 2041, the company said in a recent federal filing. That means Micron’s award will likely support only the first two facilities in New York, people familiar with the matter previously said.
Computer memory and storage chips are an essential part of everything from smartphones to the largest data centers, where they store information and help advanced logic process information. Production mainly takes place in Asia. Micron’s two biggest competitors, Samsung and SK Hynix Inc., account for most of that production.
These companies also plan to build factories in the US – for logic chips and advanced packaging respectively – as part of a groundswell of more than $200 billion in private investment in semiconductors fueled by the Chips Act.
—With help from Ian King and Jennifer Jacobs.
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