Micron Technology Inc., the largest storage chip manufacturer in the United States, is expected to receive $6 billion in subsidies from the Department of Commerce to pay for local factory construction projects as part of efforts to relocate semiconductor production back to the country.
According to insiders, this matter has not been finalized yet and may be announced as early as next week. It is currently unclear whether Micron Technology, like Intel and TSMC, will also plan to accept loans that can be provided under the Chips and Science Act passed in 2022, in addition to direct subsidies.
Driven by the news, Micron Technology's stock rose 1.82% in post market trading, after closing down 4.47% on Wednesday at $116.33. The stock has risen nearly 42% so far this year.
According to insiders, as part of the announcement, US President Biden is scheduled to travel to Syracuse, New York on April 25th, where Micron is building a factory nearby.
Looking back, the 2022 Chip Act allocated a total of $39 billion for subsidies, as well as $75 billion worth of loans and loan guarantees, to revitalize the US chip manufacturing industry.
If the subsidy from Micron Technology is successfully passed, it will become the sixth company to receive the subsidy. Before it, the five companies were a military enterprise, BAE Systems, mature process chip manufacturer Microelectronics, as well as two chip giants, Gexin and Intel, and the only overseas company - TSMC.
The top three companies have received chip bill subsidies of $35 million, $162 million, and $1.5 billion respectively, while Intel and TSMC have received direct subsidies of $8.5 billion and $6.6 billion respectively, as well as low-cost government loans of $11 billion and $5 billion, respectively.
It is reported that after the preliminary agreement is announced, Micron will conduct several months of due diligence and then receive funds in batches based on specific project benchmarks.
Micron has promised to build up to four factories in New York State and one factory in Idaho. But Micron CEO Sanjay Mehrotra stated last month that these plans "require Micron to receive sufficient chip subsidies, investment tax credits, and local incentives to address cost differences compared to building factories overseas."
According to Raymond, the United States will prioritize funding projects that begin production at the end of this decade.
Micron recently submitted a document to the federal government stating that two of its four factories in New York State are expected to meet this standard, while the other two will not be operational until 2041. Earlier, insiders said that this means Micron's bonuses may only support the first two factories in New York State.