Micron is intending to spend up to $150 billion in the next ten years to expand its fab capability around the globe — particularly in the USA, where it is looking for US government help.
It says that future DRAM and NAND demand is solid enough, boosted by AI and 5G wireless networking roll outs, to justify the overall investment. But US memory manufacturing costs are 35–45 per cent higher than in lower-cost markets with established semiconductor ecosystems. The chip supply shortage and China’s growing ambitions and ability to squeeze component supply chains has encourage the US to look more favourably on semi-conductor fabs located in or closer to the USA.
Micron President and CEO Sanjay Mehrotra pointedly said: “We look forward to working with governments around the world, including in the US where CHIPS funding and the FABS Act would open the door to new industry investments, as we consider sites to support future expansion.”
Micron reckons funding to support new semiconductor manufacturing capacity and a refundable investment tax credit are critical to potential expansion of US manufacturing as part of its $150 billion investment. EVP of Global Operations Manish Bhatia emphasised the point: “Our markets demand cost-competitive operations. Sustained government support is essential for Micron to ensure a resilient supply chain and reinforce technology leadership for the long term.”
No doubt US states will be invited to tender subsidies to get plants built in exchange for committments on jobs.
Wells Fargo senior analyst Aaron Rakers told subscribers: “We view this press release as primarily tied to the company’s appeal to the US and other governments in terms of subsidies and other forms of commitments/incentives to help fund industry investments.”
There is a small Micron DRAM & NAND fab in Manassas, Virginia, but its main DRAM fabs are in Taiwan and Japan. Its NAND is primarily made in Singapore. The company sold its Lehi fab to Texas Instruments in July for $1.5 billion.
Micron’s announcement made no mention of reports from Japan saying it intended to build a new fab there, costing up to ¥800 billion ($6.8 billion) with potential Japanese government aid.