US To Grant $6.1 Bln To Micron To Advance Chip Production

(RTTNews) - The U.S. Commerce Department is preparing to fund $6.1 billion to US chip maker Micron Technology Inc. as part of the Government's plan to boost domestic semiconductor production, Bloomberg reported citing people familiar with the matter. The award is yet to get final approval, and will be revealed next week.

In pre-market activity on the Nasdaq, Micron shares were gaining around 2 percent.

Boise, Idaho -based Micron's proposed direct funding would help it to develop its chip factories in the country. Micron is also likely to accept loans as part of its award package, but the total value of those loans remains unclear, the report noted.

Micron is building as many as four factories in New York state and one in its home state of Idaho.

Chief Executive Officer Sanjay Mehrotra reportedly said last month that its development plans "require Micron to receive the combination of sufficient Chips grants, investment tax credits and local incentives to address the cost difference compared to overseas expansion.'

The company is also developing projects in China, India, and Japan.

In October 2022, Micron had announced plans to build the largest semiconductor fabrication facility in the history of the United States. The company then said it intends to invest up to $100 billion over the next 20-plus years to construct a new megafab in Clay, New York, with the first phase investment of $20 billion planned by the end of this decade. The new megafab was expected to increase domestic supply of leading-edge memory and create nearly 50,000 New York jobs.

Earlier this week, the U.S. government offered up to $6.4 billion funding to South Korea's Samsung Electronics Co. Ltd. to build semiconductor manufacturing and research and development facilities in Texas. In late March, the government offered up to $8.5 billion in direct funding to chip maker Intel Corp. The funding has also been offered to Taiwan Semiconductor Manufacturing Co.

According to the Administration, the Government's funding to various companies under the CHIPS and Science Act would strengthen the resilience of the U.S. semiconductor supply chain, advance U.S. technology leadership, and fuel U.S. global competitiveness.

As per the Commerce Department, the U.S. is projected to be on track to produce roughly 20% of the world's leading-edge logic chips by 2030.

Biden signed the Chips Act in 2022 that pledged $100 billion in support to new semiconductor plants in the US. Biden recently noted that the CHIPS and Science Act was signed to address supply chain vulnerabilities in the country and to restore U.S. leadership in semiconductor manufacturing.