(Bloomberg) — Micron Technology Inc., the largest U.S. maker of computer memory chips, is poised to receive more than $6 billion in grants from the Commerce Department to help pay for domestic factory projects as part of an effort to bring semiconductor production back to American soil.
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The awards, which have not yet been finalized, could be announced as early as next week, according to people familiar with the matter. It’s unclear whether the company also plans to accept loans available through the Chips and Science Act of 2022 in addition to direct financing.
Micron, based in Boise, Idaho, is building factories in New York and its home state. After the preliminary agreement is announced, the company would enter into months of due diligence and then receive the money in installments tied to specific project benchmarks.
Representatives from Micron, the Commerce Department and the White House declined to comment.
The Chip Act set aside $39 billion in direct grants, as well as loans and loan guarantees worth $75 billion, to revitalize American chip production after decades of shifting production to Asia. Officials have released six preliminary awards so far: three for companies that make 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 said the agency plans to spend about $28 billion of the funding on cutting-edge projects.
Read more: Advanced chip companies want $70 billion from the US, says Raimondo
Micron has promised to build up to four factories in New York state, plus one in Idaho. But those plans “require Micron to receive the combination of sufficient Chip subsidies, investment tax credits and local incentives to address the cost difference compared to expanding abroad,” CEO Sanjay Mehrotra said last month. The company also continues with projects in China, India and Japan.
Raimondo said her agency will prioritize funding projects that begin production by the end of the decade. Two of Micron’s four New York sites 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 just the first two New York facilities, people familiar with the matter previously said.
Computer memory and storage chips are a vital part of everything from smartphones to the largest data centers, where they store information and help advanced logic process information. Production is mainly done 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 wave of more than $200 billion in private investment in semiconductors, spurred by the Chip Act.
–With assistance from Ian King and Jennifer Jacobs.
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