Micron to spend up to $100 billion to build New York chip plant

on Oct4
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Sanjay Mehrotra, CEO, Micron

Scott Mlyn | CNBC

Micron will spend up to $100 billion over at least the next two decades building a new computer chip factory in upstate New York, the state said on Tuesday.

The announcement, first reported by The New York Times, comes after the passage of the CHIPS and Science Act of 2022, a federal law championed by Senate Majority Leader Chuck Schumer, D-N.Y., that allocates $52 billion to encourage more domestic semiconductor production. Micron CEO Sanjay Mehrotra credited the passage of the law for making the investment possible, according to the Times.

Shares of Micron were up 4.5% Tuesday morning.

The risks in the U.S.’ reliance on foreign computer chip production became clear during the pandemic, as supply chain issues impacted a wide range of goods. Semiconductors are used in a variety of internet-connected devices, from cell phones to cars to medical devices.

When the CHIPS Act became law, it spurred a wave of investment announcements by semiconductor companies, including Micron, which at the time pledged $40 billion through 2030 for U.S. chip manufacturing, saying it would create up to 40,000 domestic jobs. Qualcomm also committed to buying an additional $4.2 billion worth of chips from GlobalFoundries’ plant in New York. Intel had said its plans to invest up to $100 billion in chip manufacturing in Ohio relied heavily on the federal legislation.

The choice to put the factory in New York is a win for Schumer, who has led the chips investment push and advocated for his state to host new facilities.

“The bottom line is that without the CHIPS and Science legislation, Micron would have decided to build its megafab overseas,” Schumer said in a statement. “This investment leaves no question that the future of microchip manufacturing will remain not just in this country, but in Syracuse specifically, and that our future will be built in Upstate New York, with Central New York as a global center of the chip industry.”

New York’s Democratic governor, Kathy Hochul, also played a role, working to persuade Micron to bring its plant to Clay, a town near Syracuse, the Times reported. The performance-based incentive package from the state is valued at $5.5 billion and is tied to Micron’s commitment to create 9,000 new jobs as well as following through on the $100 billion investment. Micron must also meet certain sustainability standards to get the tax credits.

According to a press release from Hochul’s office, an economic impact study by Regional Economic Models found the project will create an average of nearly 50,000 jobs in New York state per year over the first 31 years of its operation. It also estimated it would generate an additional $16.7 billion in real, inflation-adjusted, economic output for the state.

“Micron, an American company, is investing $20 billion dollars this decade and up to $100 billion over twenty years in CHIPS manufacturing in upstate New York, creating tens of thousands of good paying jobs,” President Biden said in a statement from the White House. “Together, we are building an economy from the bottom up and the middle out, where we lower costs for our families and make it right here in America.”

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