Department of Commerce Awards CHIPS Incentives to Micron for Idaho and New York Projects

Estimated reading time: 4 minutes

The Biden-Harris Administration announced that the U.S. Department of Commerce awarded Micron Technology up to $6.165 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The award follows the previously signed preliminary memorandum of terms, announced on April 25, 2024, and the completion of the Department’s due diligence. This funding will support the first step in Micron’s two-decade vision to invest approximately $100 billion in New York and $25 billion in Idaho, which will create approximately 20,000 jobs and will help the U.S. grow its share of advanced memory manufacturing from less than 2% today to approximately 10% by 2035. The Department will disburse the funds based on Micron’s completion of project milestones.

This investment will help strengthen U.S. economic resiliency by bolstering a reliable domestic supply of leading-edge DRAM chips that are important components for advanced technologies such as, personal computing, industrial, high-performance compute, automotive, industrial, wireless communications and artificial intelligence. Micron’s DRAM chips also power the company’s performance memory, known as High-Bandwidth Memory (HBM), which is critical for enabling new AI models. With this funding, Micron plans to expand the development and production of the most advanced memory semiconductor technology in New York and Idaho and is committing to spend approximately $50 billion before the end of the decade.

In addition, the Biden-Harris Administration announced the Department of Commerce has signed a non-binding Preliminary Memorandum of Terms (PMT) with Micron Technology for up to $275 million in proposed funding to expand and modernize its facility in Manassas, Virginia. The expected capital expenditure for the modernization will be $2 billion over the next several years. The proposed project would onshore Micron’s 1-alpha technology to its Manassas facility, significantly increasing monthly wafer output.  Micron’s 1-alpha node, an advanced DRAM process technology, offers meaningful improvements in bit density, power efficiency, and performance capability. Supporting a stable supply of Micron’s 1-alpha technology would advance U.S. supply chain resiliency because the legacy DRAM memory chips that would be made in Virginia are important components for the automotive and industrial markets. Micron’s proposed project in Manassas would be expected to create over 400 manufacturing jobs and up to 2700 community jobs at the peak of the project.

“Memory chips are foundational to all advanced technologies, and thanks to the bipartisan CHIPS and Science Act, America is rebuilding its capacity to produce these critical capabilities, said U.S. Secretary of Commerce Gina Raimondo. “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, which is crucial for safeguarding our leadership on artificial intelligence and protecting our economic and national security.”

“As the only U.S.-based manufacturer of memory, Micron is uniquely positioned to bring leading-edge memory manufacturing to the U.S., strengthening the country’s technology leadership and fostering advanced innovation,” said Micron President and CEO Sanjay Mehrotra. “Micron’s investments in domestic semiconductor manufacturing capabilities, supported by the bipartisan CHIPS Act, will help drive economic growth and ensure that the U.S. remains at the forefront of technological advancements. We appreciate New York’s Green CHIPS legislation and the local partnership with Micron to create a Community Investment Framework to revitalize central New York. Many federal, state and community leaders have played a pivotal role in the process, from the development of Micron’s plans to finalizing essential investment tax credits. These include New York Governor Kathy Hochul, Senate Majority Leader Chuck Schumer, U.S. Senator Mark Warner, U.S. Senator Mike Crapo, U.S. Senator James Risch, Idaho Governor Brad Little, Virginia Governor Glenn Youngkin, Mayor Lauren McLean, and County Executive Ryan McMahon. Their contributions support Micron's continued industry leadership as we work to meet the growing demand for memory.”

As stated in the CHIPS Notice of Funding Opportunity for Commercial Fabrication Facilities, CHIPS for America will distribute direct funding to recipients for capital expenditures based on the completion of construction, technology, production, and commercial milestones. The program will track the performance of each CHIPS Incentives Award via financial and programmatic reports, in accordance with the award terms and conditions.

Additionally, as explained in its first Notice of Funding Opportunity, the Department of Commerce may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a PMT is signed, the Department of Commerce begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced.