Hey Joe, those US CHIPS funds still coming? We kinda need them, says Micron

And by kinda, Idaho fab giant means absolutely 'necessary' for the plants it already announced

Micron has advised investors that federal grants and other tax incentives are “necessary” for development of its already-announced chip fabs in Idaho and New York.

The American chip maker on Monday produced a regulatory filing that informed investors it has therefore applied for funds under the CHIPS and Science Act, President Joe Biden's $52.7 billion program to boost the semiconductor industry, and which includes $39 billion of manufacturing of manufacturing incentives for US and foreign companies that build chip factories on American soil.

Last September, just weeks after the CHIPS Act became law, Micron announced its intention to build a $15 billion memory fab at its Boise, Idaho, headquarters. The state of Idaho offered unspecified incentives to support the project.

The announcement was followed a month later by news of a DRAM fab project bound for Clay, New York with an even loftier price tag of $100 billion.

The facility, to be built over the next 20-plus years, will eventually create four cleanrooms covering a total of 2.4 million square feet, the chipmaker claimed. However, the first phase of the project, expected to be completed over the next decade, has a more modest $20 billion budget. The state of New York offered $5.5 billion in incentives to help things along.

When it announced the two fabs, Micron “anticipated” CHIPS Act funding would contribute to its costs, in addition to other incentives. Now it’s officially applied for those federal funds.

Micron is far from alone in having done so. Earlier this month the US Commerce Department, which oversees the CHIPS Act funds, revealed that 460 companies have expressed interest in the program.

Meanwhile, large chipmakers have already broken ground on fab sites across the US. Intel is working on projects collectively valued at $50 billion in Arizona and Ohio. Also in Arizona, TSMC is building fabs with a combined $40 billion price tag. Samsung’s fab in Taylor, Texas, is expected to cost $25 billion.

Uncle Sam is yet to write any CHIPS Act checks, however application rules released in February show the Dept of Commerce expects disbursements to range from 5 to 15 percent of chipmakers' capital expenditures, in addition to local and state incentives. This means Micron could reasonably expect to receive somewhere between $1.75 billion to $5.25 billion of the $35 billion it plans to spend on its plants in Boise and Clay.

However, not everyone is thrilled with some terms and conditions associated with CHIPS Act grants. One of the more controversial requirements bars chipmakers from engaging in collaborating with or licensing to chipmakers in China for ten years. Expanding existing activities in China is also a no-no. Disclosures of technology and company finances can also be required.

Officials in South Korea — home to Samsung and SK hynix — have expressed concerns regarding the latter requirements.

Micron, meanwhile, has other worries in China after the chipmaker was ruled a national security threat by Beijing and barred from selling to some customers.

Micron has since warned that the ban could end up costing the company $4 billion in annual revenue, making securing US federal investment in the company even more vital. ®

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