Micron announces big changes, expansive plans. What we know about the impact on Boise

·5 min read

Boise’s Micron Technology Inc. says it plans to invest more than $150 billion over the next 10 years in expanding its memory-manufacturing capacity and in its research and development. It could include a possible expansion in the U.S.

President and CEO Sanjay Mehrotra did not say how the expansion might affect Boise, though a company news release hinted that the Boise campus could benefit from proposed federal subsidies aimed at supporting semiconductor research and development.

Micron once made many of its chips in Boise, the city of its founding, but ended production manufacturing in 2009. Its headquarters campus in Southeast Boise has transformed into the company’s primary research-and-development center, employing highly educated engineers and scientists from around the world. Micron says Boise has the only American research and development center for dynamic random-access memory, or DRAM, Micron’s principal product.

Hundreds of employees and family members of Micron Technology Inc. came to Cecil D. Andrus Park in October 2018 for a party honoring Micron’s 40th birthday.
Hundreds of employees and family members of Micron Technology Inc. came to Cecil D. Andrus Park in October 2018 for a party honoring Micron’s 40th birthday.

Micron still employs about 5,600 people in Boise, making it the largest for-profit employer in Idaho’s Treasure Valley. It still has fabrication units on its main campus for research and testing. Chips for sale are manufactured at U.S. plants in Utah and Virginia and in Japan, Malaysia, Singapore, Taiwan and China.

The company’s announcement Wednesday came amid a worldwide global computing-chip shortage prompted in part by rising demand as artificial intelligence, or AI, broadens its reach.

Micron said memory manufacturing at competitive cost requires large-scale plants with the potential to employ tens of thousands of workers. U.S. memory-manufacturing costs run 35-45% higher than in lower-cost markets with established semiconductor ecosystems, the company said.

Passage of refundable tax credit is ‘critical’

Funding to support new semiconductor manufacturing capacity and a refundable investment tax credit are “critical to potential expansion of U.S manufacturing as part of Micron’s targeted investment,” the company said.

Chipmaking is a capital-intensive industry, and Micron already invests $8 billion to $10 billion a year in capital expenditures worldwide.

Mehrotra said in the news release that Micron’s plans could be helped if Congress approves funding for a bipartisan proposal called the Chips for America Act. The act, which would subsidize chip development and manufacturing, passed as part of a defense authorization bill without funding. The Senate in June passed a separate measure to provide $52 billion for it.

Sanjay Mehrotra is the President and CEO of Micron Technology.
Sanjay Mehrotra is the President and CEO of Micron Technology.

Mehrotra said a bill proposed by a Democratic U.S. senator to provide tax credits for semiconductor manufacturing would also influence Micron’s decision whether to expand in the U.S.

Sen. Ron Wyden of Oregon has proposed the Facilitating American-Built Semiconductors Act — or FABS Act, for short. The acronym refers to the semiconductor industry’s description of its manufacturing plants as fabrication units, or fabs.

US share of manufacturing capacity falls by 2/3 since 1990

“The share of global semiconductor manufacturing capacity in the U.S. has eroded from 37% in 1990 to 12% today, mostly because other countries’ governments have invested ambitiously in chip manufacturing incentives and the U.S. government has not,” the Semiconductor Industry Association says in a statement urging the U.S. House to approve the funding.

In its news release, Micron said memory and storage — the services its chips provide — are taking up a rising share of the global semiconductor industry and now represent about 30% of the semiconductor market.

Mehrotra told CNBC on Wednesday that Micron is the No. 1 supplier of memory and storage chips to the auto industry.

“Memory is at the leading edge of semiconductor manufacturing and fuels everything from feature-rich 5G smartphones to the AI-enabled cloud,” Mehrotra said in the release. “We look forward to working with governments around the world, including in the U.S. where CHIPS funding and the FABS Act would open the door to new industry investments, as we consider sites to support future expansion.”

Micron remains vague about Boise. This is its explanation

The company declined to specify what its investments might mean for Boise.

“We are evaluating all options, including both existing and new sites, assessing government incentives that are required for cost-competitive U.S. memory manufacturing, and weighing those against opportunities in other geographies,” Micron said in an emailed statement in response to an Idaho Statesman inquiry.

“Our site selection process is taking into account multiple factors,” the statement said. “These include access to a strong talent pool, reliable and cost-competitive utility services, alignment with our corporate sustainability objectives, and a favorable regulatory environment.

“A critical consideration is meaningful cost reduction to help us be more competitive, especially in the face of increased global competition and consolidation in the semiconductor industry. This project will require significant investments and incentives both up front, and on an ongoing basis to help us to build and operate competitive manufacturing facilities.

“We will share specific locations as we close on unique investment targets.”

Micron sales grew robustly in its latest fiscal year, which ended Sept. 2, after declining in the two previous years. The company just rewarded investors by beginning to pay a 10-cent quarterly dividend starting this month.

Investors responded to the latest announcement with a slight increase in Micron’s stock price. Micron closed Wednesday at $68.27 per share, up from $67.57 a day earlier. Shares have lost about a third of their value since their past-12-months peak of $95.30 in April.

Business reporter John Sowell contributed.

Micron gets tough with workers: Get vaccinated within 10 weeks, or you’re out of a job

Micron Technology would not exist without investment from Boise man who died Tuesday

Micron moves to provide greater focus to job seekers and employees with disabilities

Micron lost its top customer, China’s Huawei, to U.S. sanctions. So why is its stock up?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting