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Legislature eyes tax break for possible $1.8 billion semiconductor expansion project as Micron considers Boise plant growth

Boise-based Micron Technology is stepping up its pitch for government help to expand in the US — and the Idaho Legislature might help.

Two sources familiar with the negotiations tell BoiseDev that the City of Boise and State of Idaho has been in negotiations with the chip giant to expand manufacturing in Boise since last fall.

The news comes after BoiseDev’s initial reporting a few months ago about a large business expansion project that city leaders are working on, which could be related to Micron. The State of Idaho listed three ‘example’ semiconductor projects in the works, the largest of which would total a possible $1.8 billion of investment.

The company, founded in 1978, makes semiconductor chips that are a key element in computers, cell phones, and other electronic devices.

New tax breaks possible

The new bill introduced by Rep. Mike Moyle, R Star, on Wednesday would provide a break on sales taxes for the expansion of a semiconductor manufacturer in Idaho. Though the bill does not mention or specify Micron, a fiscal note attached to the bill said the Idaho Department of Commerce said there “may be three qualifying projects of varying size, including a small, medium, and large expansion…”

The statement of purpose for the bill references a table of the three projects listed “below in the table,” but there was no list of projects included with the legislation’s materials made available to BoiseDev at the Statehouse Wednesday. When asked about the list of projects, Moyle directed BoiseDev to ask the Department of Commerce.

Idaho Department of Commerce Marking and Innovation Administrator Matt Borud provided Boise with the list of three projects, but it did not identify the possible companies involved or their locations. They range from a $12 million investment for the smallest project up to $1.8 billion.

A table listening three possible semiconductor projects provided by the Idaho Department of Commerce

The information shows the tax break could generate 1,694 new jobs.

Despite the specificity of the numbers and Manwaring’s public statement, the Dept. of Commerce told BoiseDev after the publication of this piece that the numbers in the chart are “not reflective of actual projects or numbers.” The department said the numbers are “simply examples.”

The Idaho law has a provision that ties it to proposed federal legislation that would provide federal tax incentives for domestic semiconductor expansion.

The exemption for tax on expansion by semiconductor manufacturers is similar to legislation passed last year for large data center expansion in Idaho. That exemption will be used by Facebook parent Meta to build a large facility in Kuna.

Micron could also benefit from another tax break passed by the legislature in 2008. That move, which was designed for another firm, allowed Micron to cap its total property tax value at $400 million. The company has repeatedly expanded its Boise facility but has not paid any tax on the increased value of its local facilities.

CEO: Government support needed

Micron Technology CEO Sanjay Mehrotra appears on Bloomberg TV from the company’s facility in Boise Tuesday. Courtesy Bloomberg TV

Tuesday, Micron CEO Sanjay Mehrotra spoke with Bloomberg TV in an interview staged at the company’s Boise facility. He continued his pitch for government incentives to help increase chip manufacturing on US soil.

“What will be necessary is to get the necessary support from government to overcome the up to 45% cost difference that exists versus Asia production,” he said. “Micron has been investing, here, in leading-edge R&D in this facility that you are seeing here and the most advanced tools that will go into this facility to drive innovation forward.”

He said the investments will total more than $1 billion, and said the company will spend a record amount on capital expenditures this year around the world.

Boise keeps details of staff trip to San Jose under wraps

Boise City staff didn’t just visit Chicago on a business attraction trip last year as we reported in November.

Travel requests obtained in a public records request by BoiseDev show Boise’s Economic Development Director Sean Keithly and Public Works Director Steve Burgos traveled to San Jose, where Micron CEO Sanjay Mehrotra has his main office, in early December for a “work-related meeting.” This is the same reason given on the travel request for the November Chicago trip when Boise spokesperson Justin Corr said Mayor Lauren McLean, Keithly and Burgos traveled on a business attraction meeting.

When asked if Keithly and Burgos were visiting San Jose to meet with Micron, Corr said he “couldn’t say.”

[Boise to change travel expense policies, 20 years after Coles’ misuse of funds]

In January, BoiseDev asked McLean directly if the city was engaged with Micron on expansion. She said she couldn’t comment, but did comment on why she felt the city should work on adding jobs like the ones Micron could provide.

“People ask, ‘why are you bringing more jobs here, we don’t need more people here.’ Wages need to rise. (In a 2019 Brookings Institute report on Boise) there were industry areas that it was proposed that we improve and address – industrial etc.,” she said. “As more and more people bring their jobs here and make it harder for Boiseans to buy homes if we want to change that dynamic – we have to do everything we can to as a city to create more opportunity for our residents because that lifts wages and will make homes more affordable.”

Other sites?

Reporting from other news outlets indicates Micron is looking at sites beyond Boise, as well which Micron confirms. But, the company pulled out of consideration of a large potential expansion in the Research Triangle area of North Carolina.

The Triangle Business Journal reports that Chatham County, NC, was in the running for a $40-billion expansion by the chipmaker, but that Micron notified local officials the site was no longer in the running. The paper said local officials and Micron could not come to terms on incentives and tax credits.

The Austin Business Journal said early this year that Micron was also considering sites in Texas for expansion.

A Micron spokesperson told BoiseDev that the company continues to expand R&D capacity and clean room space in Boise – projects we’ve reported on previously. The spokesperson also repeated a statement it provided us in November, which says, in part:

“Locations are being vetted across a number of factors including site availability suitable for a fab, access to a strong talent pool, reliable and cost-competitive utility services, alignment with our corporate sustainability objectives, and a favorable regulatory environment,” the statement said. “In the U.S., we’re engaging in discussions with multiple states and will provide updates as the process continues and at the appropriate time. There are multiple factors that inform our decision to invest billions of dollars to construct and operate a fab. We will share specific locations as we close on unique investment targets.”

The company did not answer our specific question on if it is considering a fab expansion in Boise as other sources have told us.

Boise eyeing water recycling facility near Micron campus

Semiconductor manufacturing is a water-intensive process, making it a big piece of the puzzle.

For the last several years, the City of Boise has been working on a new water renewal utility plan to expand the city’s wastewater treatment capacity. This new strategy includes plans for water recycling, which would take highly treated wastewater effluent and reuse it for other purposes, including manufacturing.

In 2021, Boise asked voters to approve a $570 million bond to pay for decades of improvements, including a new water renewal facility located in southeast Boise near Micron’s manufacturing facility. The vision for this third facility would be to create a “closed-loop” system where water from industrial users in the area, like Micron, would come into the plant, be treated, and sent back to the facility to be used again.

Micron was one of the major contributors to the Yes for Clean and Affordable Water PAC, which ran ads and sent mailers in support of the water bond. It passed with a hefty majority.

Mayor McLean also nodded to Micron’s partnership with the city on its water recycling program during the event with Bloomberg News at the Micron facility this week.

“In fact, we’re piloting a clean water and renewal project with Micron,” McLean said.

Update: Added additional comment from Idaho Dept. of Commerce on specific numbers being examples.

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Margaret Carmel & Don Day - BoiseDev
Margaret Carmel & Don Day - BoiseDev
Don Day is founder & editor of BoiseDev. Margaret Carmel is the senior reporter for BoiseDev.

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