Micron pitches congress for US expansion aid, with Boise a candidate: ‘one of the largest semiconductor investments’ in US history

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The CEO of Boise-based Micron Technology, as well as Intel, appeared during a hearing on Capitol Hill in Washington, DC to pitch for government support for expansion in the US.

As BoiseDev previously reported, Micron has targeted its Boise plant for manufacturing expansion, working with City of Boise and State of Idaho officials for support and incentives to expand locally.

Micron’s Sanjay Mehrotra and Intel’s Pat Gelsinger, as well as two other CEOs from non-chipmaking companies, delivered prepared remarks and took questions from senators on the Committee on Commerce, Science & Transportation. The tech CEOs are hoping Congress will pass two pieces of legislation – the CHIPS Act and FABS Act.

The two pieces of legislation await final passage and reconciliation between the House and Senate, and if they make it over that hurdle, approval by President Joe Biden.

[Idaho Supreme Court sides with Micron in wage case]

‘Invigorate’ US manufacturing

Micron Idaho expansion
Micron Technology’s campus in Boise. Photo: Don Day/BoiseDev file

“These two incentives together would invigorate domestic manufacturing in the semiconductor industry and allow companies to invest with confidence for the future,” Mehrotra told the panel. “Together, these developments would kickstart investment in workforce development, R&D, innovation, and expansion of manufacturing in the near term. Memory is at the leading edge of semiconductor technology, and Micron is leading the world in this technology.”

Micron has announced it will spend $150 billion worldwide on the expansion of manufacturing and research and development. But the company hasn’t said how much, if any, of that investment will come in the US. Mehrotra told Congress that government incentives are key to the company directing investment domestically.

“We continue to explore plans to build new fabs in the United States. Our expansion plans, if executed, would constitute one of the largest single semiconductor investments in the history of the United States,” Mehrotra said. “It would require close coordination with federal and state partners to ensure the economic viability of our operations in a global, competitive marketplace.”

[Micron plans daycare across from Boise HQ]

Those plans, according to extensive reporting by BoiseDev, could include expansion at the Boise site where the company is headquartered. Currently, the Boise operation serves as Micron’s lead research and development facility, and the company has poured in significant investment in the last decade. But most chip manufacturing now happens overseas. Mehrotra said just two percent of semiconductor memory chips are made in the US – with all of that happening at Micron’s facility in Manassas, Virginia. The rest is produced in Asia, according to Mehrotra’s testimony.

Mehrotra said several US plants could be built.

“To be commercially viable in the long term, memory and storage fabs must produce at very high volumes consistently,” he said. “Multiple facilities are required to achieve this scale, each costing more than tens of billions of dollars fully equipped. Technological advancements are increasingly complex and expensive.”

Both Gelsinger and Mehrotra repeatedly emphasized that overseas governments have been actively engaged in providing incentives and support to locate manufacturing on those foreign soils.

“The US government needs to level the playing field and create incentives to support investment in domestic semiconductor manufacturing facilities,” Mehtortra said. “Nearly every other country that has a significant share of semiconductor manufacturing offers major government incentives – including grants and tax breaks. “

International politics

Ranking member Sen. Roger Wicker, R-Mississippi, raised Russia’s invasion of Ukraine and warned of consequences if China decided to launch an invasion of Taiwan, territory China contests as its own.

“We are dangerously exposed. Taiwan has 92% of most advanced semiconductor capacity. Think of the consequences if China were to invade our Taiwanese partner,” Wicker said. “Let’s keep that scenario in mind as Congress continues its work to ensure American leadership in this vital industry.”

Sen. Maria Cantwell, D-Washington, said “you and I are on the same page,” with regard to Wicker’s comments.

“Other governments are aggressively offering significant incentives to semiconductor companies like ours to build fabs on their shores,” Intel’s Gelsinger said. “We must look beyond short term capacity and recognize what US chip leadership really entails.”

“Escalating geopolitical risks have highlighted the urgency to reconcile and pass an innovation and competition bill that includes full funding for the CHIPS act and the investment tax credit, part of the bipartisan FABS act,” Mehrotra said.

Chip shortages

The other key factor that drove the hearing is the current shortage of semiconductor chips – impacting a wide swath of the economy, including vehicles, computers, and national defense.

“The cost of a used car has gone up 40 percent,” Cantwell said. “A lot of that is due to the semiconductor shortage. So why would a used car go up? They already have the chips in them. Because if you want to buy a new car, you’re going to have to wait. People who can afford a new car and need one are instead buying a used car, which is driving up the price.”

“Semiconductors are the lifeblood of modern industrial production, and the shortage over the last two years has caused and made worse many of our supply chain disruptions,” Wicker said.

Mehrotra mentioned and boosted the company’s work in Boise a number of times – citing the R&D facility, its headquarters, and work to reduce its net water usage in Idaho. He also touted efforts in other states.

“Micron is the only company developing leading-edge memory and storage technology in the US, with operations in nine different states,” Mehrotra said. “We are headquartered in Boise, Idaho with 43,000 team members worldwide. Nearly 10,000 of our employees are US-based.”

Idaho tax break on governor’s desk

In Idaho, legislation introduced in the Idaho House of Representatives would provide tax breaks to Micron and other chipmakers for expansion in the state. The legislation passed both houses and is now on the governor’s desk for approval or veto. It would provide tax incentives for expansion.

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

In addition, Micron could benefit from 2000s-era legislation which inadvertently capped the taxable property value of Micron’s Boise plant. The company pays no incremental property tax on increased value on any expansion in the state – providing a significant built-in incentive to expand here. The company owns significant land holdings adjacent to its Boise facility on Federal Way.

Don Day - BoiseDev Editor & Founder
Don Day - BoiseDev Editor & Founder
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at [email protected].

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