US Commerce Dept coughs up $6.1B Christmas present for Micron

American memory vendor Micron will receive $6.1 billion in CHIPS Act funding under a deal finalized by the US Commerce Department on Tuesday.

The funding, first teased in April, pulls from the $39 billion in CHIPS cash set aside to support the development of domestic fabs. In the case of Micron, the subsidies will support the development of fab facilities in New York worth $100 billion and Idaho valued at $25 billion. Micron plans to invest roughly $50 billion by the end of the decade.

According to the release, the expansion is expected to create 20,000 jobs over its lifetime and help to grow the US' share of advanced memory manufacturing from less than 2 percent today to 10 percent by 2035.

In particular, high bandwidth memory (HBM) has become a key market amid the AI boom. HBM is a key component in modern AI accelerators including Nvidia and AMD GPUs, as well as Intel's Gaudi accelerators.

Unfortunately for Uncle Sam, the vast majority of HBM today is manufactured outside the US, largely by South Korean memory giants SK Hynix and Samsung Electronics.

"With this investment in Micron, we are delivering on one of the core objectives of the CHIPS program — onshoring the development and production of the most advanced memory semiconductor technology," US Commerce Secretary Gina Raimondo said in a canned statement.

Beyond the $6.1 billion in funding announced today, Micron could receive an additional $275 million in cash under a non-binding preliminary memorandum to expand and modernize its Manassas, Virginia plant. The project, which has an estimated $2 billion to complete, will see the US memory manufacturer onshore its 1-alpha tech.

If approved, the additional project is expected to create about 400 manufacturing jobs once complete.

However, just like earlier CHIPS Act awards, Micron isn't actually walking away with a $6.1 billion check. The funding is indexed to major project milestones to ensure the fabs and associated facilities are actually built.

• Uncle Sam lays out plans for $825M EUV R&D site in New York
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• Intel locks down $7.86B in funding from US CHIPS Act
• CHIPS Act funding in question as House Speaker waffles on plan to repeal bill

For those wondering how big a difference $6.1 billion will make to a project requiring $125 billion in capital expenditures to complete, it's worth noting that the funding announced today only constitutes direct funds. CHIPS Act recipients are also eligible for a 25 percent tax credit worth far more than the grants themselves.

With a new administration incoming, Trump loyalists have already signaled that changes may be coming to the CHIPS Act. This has seemingly lit a fire under the Commerce Department to finalize the deals before the former president takes office once again.

Over the past month, the Biden administration has finalized a flurry of preliminary awards including up to $6.6 billion in direct funds for Taiwan Semiconductor Manufacturing Co's (TSMC) Arizona chip plant, and another $7.8 billion in funding for Intel. ®