Biden grants $6 billion to Micron to boost chip production

WASHINGTON — U.S. President Joe Biden was in Syracuse, New York, Thursday to tout a deal to provide memory chip maker Micron Technology with $6.1 billion in federal grants to support the firm in building factories in the states of New York and Idaho.

“We’re bringing advanced chip manufacturing back to America after 40 years,” Biden said Thursday. He said the funding, paired with a $125 billion investment from Micron, represents the “single biggest private investment ever in history of these two states.”

The investment will support the construction of two plants in Clay, a suburb of Syracuse, New York, and one in Boise, Idaho. The grant will unleash “$50 billion in private investment by 2030 as the first step towards Micron’s investment of up to $125 billion across both states over the next two decades,” the White House said in a statement.

The deal was announced last week by Senate Majority Leader Chuck Schumer, a Democrat from New York, who personally lobbied Micron to invest in his state. It’s the latest in a series of awards given by the administration, intended to shore up domestic production of advanced semiconductors using funds from the CHIPS and Science Act of 2022. The aim is to boost domestic manufacturing and reduce reliance on chip supplies from China and Taiwan.

This investment will “supercharge Micron to build the most advanced memory chip factory in the world, Schumer said Thursday. “America’s future will be built in Syracuse, not in Shanghai.”

The administration recently awarded Samsung, Taiwan Semiconductor, Intel, GlobalFoundries, Microchip Technology, and BAE Systems, more than $29 billion in federal grants for chipmaking investments. It’s part of an effort to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to the Semiconductor Industry Association.

To address such stiff foreign competition, the $280 billion bipartisan CHIPS and Science Act offers $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing.

Manufacturing revival

The announcements are part of the economic vision the president is offering to voters in his re-election bid – that he is working to create a manufacturing revival in the country, including in Republican-controlled districts such as where the Micron plant will be located.

“Micron’s total investment will be the largest private investment in New York and Idaho’s history, and will create over 70,000 jobs, including 20,000 direct construction and manufacturing jobs and tens of thousands of indirect jobs,” the White House said.

Ahead of the November presidential election, Biden’s strategy appears to be to announce investments in manufacturing facilities in Georgia, Idaho, North Carolina and Ohio, states where Democrats lack a strong foothold.

It is not clear whether the approach will succeed as voters will not immediately feel the effects. The initial phase of the Micron project, for example, would see the first plant opened in 2028 and the second in 2029.

Meanwhile, voters are concerned about high inflation, and dislike Biden’s economic job performance. A recent Reuters/Ipsos poll shows 34% of respondents approving of Biden’s approach on the economy, compared to 41% who favor the approach of former president Donald Trump, the presumptive Republican nominee.

Still, Biden’s trip to New York is an opportunity for him to celebrate another victory following a string of good news for the president. On Wednesday, he secured the endorsement of the North America’s Building Trades Unions and signed a $95.3 billion aid package for Ukraine, Israel and Taiwan after months of congressional gridlock.

Paris Huang contributed to this report.

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