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Micron considering new U.S. memory chip factory as it gears up spending

Stock MarketsOct 20, 2021 06:45AM ET
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2/2 © Reuters. FILE PHOTO: Micron Technology's solid-state drive for data center customers is presented at a product launch event in San Francisco, U.S., October 24, 2019. REUTERS/Stephen Nellis 2/2

By Stephen Nellis

(Reuters) - Micron Technology Inc (NASDAQ:MU) said on Wednesday it is considering building a new memory factory in the United States but that state and federal subsidies will be needed to offset costs that are higher than its factories in Asia.

The Boise, Idaho-based company is the only American firm that makes both key types of memory chips, competing against South Korea's Samsung Electronics (OTC:SSNLF) Co Ltd and SK Hynix and Japan's Kioxia, Toshiba (OTC:TOSYY)'s former memory chip unit.

Micron has pilot manufacturing lines for developing new technologies at its Idaho headquarters and a factory in Virginia that turns out special high-reliability chips for automobiles. But its most advanced memory chips, which go into devices including PCs, phones and data centers, are made in Taiwan, Japan and Singapore.

Sumit Sadana, Micron's chief business officer, told Reuters memory chips are about 30% of the global semiconductor market but only 2% are made in the United States.

"We certainly want to very seriously assess manufacturing in the U.S., because the U.S. ought to have more than 2% of memory manufacturing for the sake of national security and for the sake of supply chain resiliency," Sadana said in an interview.

Sadana said the company has not settled on a country for its next factory for advanced chips. The factories will require tools such as ASML Holdings' extreme ultraviolet (EUV) lithography machines, which can cost more than $100 million each.

Micron plans to spend up to $12 billion in capital expenditure and $3 billion on research and development next year, Sadana said, and up to $150 billion over the next decade.

Micron estimates costs for memory manufacturing are 45% higher in the United States than in Asia, Sadana said.

He said Micron's decision will depend on whether U.S. subsidies for buildings factories and investment tax credits for expensive tools - both of which are being debated in the U.S. Congress - are put in place.

"We need these policies to be stable and bipartisan in nature," he said.

Micron considering new U.S. memory chip factory as it gears up spending
 

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Junk Man
Junk_Man Oct 20, 2021 6:59AM ET
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45% higher cost is significant. If the factory is fully automated, what is the breakdown of the higher cost?
John Laurens
John Laurens Oct 20, 2021 6:27AM ET
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Key words here.. "we need"
 
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