The U.S. Dept. of Commerce has offered Micron Technology Inc. $6.1 billion in direct funding from a CHIPS and Science Act program to support construction of three semiconductor fabrication plants, or fabs, officials announced April 25. One of the plants is already under construction.

Micron is expanding its research and development facility in Boise, Idaho, with construction of a neighboring high-volume manufacturing fab. It also plans to put some of the federal funding toward construction of the first two fabs at a site in Clay, N.Y. Each of the three fabs would have 600,000 sq ft of clean room space.

The projects are expected to involve 4,500 construction jobs each in New York and Idaho. The work is subject to project labor agreements.

Micron says construction of the Boise fab started in October and the plant is scheduled to begin operating next year. Exyte is construction manager for that project. The New York fabs are still in design and permitting, according to the company. It aims to begin construction on the first fab there next year to start production in 2028.

As part of the nonbinding preliminary terms with Commerce Dept. officials, Micron said it committed to investing $50 billion in the projects over the next six years. The projects represent the largest private investments made ever in both New York and Idaho, President Joe Biden said at an event announcing the funding. 

In addition to the direct funding, Commerce offered Micron up to $7.5 billion in loans, and officials said the company has indicated it will claim a federal investment tax credit covering up to 25% of certain capital costs. New York has also offered Micron an incentive package worth $5.5 billion including a 5% investment tax credit, and Idaho has also offered it incentives including reduced state taxes. 

Commerce funding comes from a program created by 2022’s CHIPS and Science Act, which included $39 billion to support construction, expansion and modernization of facilities related to semiconductor production. 

Micron plans to produce leading-edge Dynamic Random-Access Memory (DRAM) chips at the fabs. Currently, Commerce officials say all leading-edge DRAM production is done in Asia. That’s partially because the cost to build and manufacture in the U.S. grew to more than 35% higher than in Asia, Micron President and CEO Sanjay Mehrotra said during the announcement event.

"But that is going to change with the CHIPS Act support, local and state support,” he said. “The cost gap will be narrowed, allowing Micron to make the U.S. home to the most advanced memory manufacturing in the world.”

The Biden administration has framed the growth of domestic semiconductor production as an important issue for the U.S. economy and national security. The chips have a wide range of uses, from consumer goods to military equipment as well as developing technologies such as artificial intelligence. 

“When the pandemic shut down chip factories overseas, prices of everything went up here at home,” Biden said. 

Commerce has offered CHIPS program funding to seven chip makers so far. The largest direct funding award from is $8.5 billion for Intel, according to U.S. Commerce Secretary Gina Raimondo. Officials have also offered $6.6 billion to TSMC, $6.4 billion to Samsung, $1.5 billion to GlobalFoundries and smaller amounts to Microchip Technology Inc. and BAE Systems. 

Micron plans to build two more fabs at the New York site in the future, but that project is not supported by this funding. The company also announced it is seeking funding under a separate CHIPS program application for a modernization of a fab in Manassas, Va.