Now that the U.S. government has finally settled the matter of whether it would be providing subsidies to entice chip fabs to setup shop within the U.S., those fabs and chip makers are starting to hammer out their domestic investment plans. Of all of the proposals revealed so far, Micron's new proposal stands to be the most ambitious. Last week the company announced plans to build the largest chip production complex in the history of the U.S. in central New York state. The plan will span 20 years of construction and upgrades, with a total price tag expected to hit around $100 billion by the time Micron is finished in the 2040s. 

Micron's new site near Clay, New York, will not only be the company's largest campus ever built, but will also be the largest chip fab in the USA. The new Micron campus will produce DRAM using leading-edge process technologies and is expected to eventually include four 600,000 feet2 (55,700 meters2) clean rooms. Which, to provide some context, is roughly eight-times the clean room space of GlobalFoundries' Fab 8. The new fab complex will complement Micron's already announced campus near Boise, Idaho, that is expected to start coming online starting in 2025. Both sites will be instrumental to meet Micron's goal to produce 40% of its DRAM in the U.S. over the next decade.

According to Micron, the company's investments in its New York production facility will total $100 billion when fully built, and it will create some 9,000 Micron jobs along with some 41,000 indirect jobs. The first phase of the Clay, New York, project is expected to cost Micron around $20 billion in total over the rest of this decade. The DRAM maker expects to get $5.5 billion in incentives from the state of New York over the life of the project, as well as federal grants and tax credits from the CHIPS and Science Act. In addition, Micron and the state of New York will also invest $500 million over the next 20+ years in community and workforce development.

Micron plans to start site preparation work in 2023 and start construction in 2024. The facility ramp up is set to begin in the second half of the decade based on industry demand for DRAM devices.

Broadly speaking, fab complexes with eye-popping price tags are quickly becoming the norm in the fab industry as the cost of building and equipping successive generations of fabs continues to balloon. And while Micron is not the first company to plan for a twelve digit price tag for a new fab complex (Intel's new fab complex in Ohio is officially expected to cost around $100 billion when completed), Micron's announcement is notable in that unlike Intel and TSMC, Micron isn't a logic producer. So the company's $100 billion plans are entirely for memory, a relatively bold commitment for a conservative company that's competing in the tech industry's classic commodity market.

Bearing in mind that the new fab in in Onondaga County, New York, is not set to come online until the later half of the decade, it is too early for Micro to reveal which process technologies and types of products it will produce. The only thing that the company says is that this will be a leading-edge facility that will produce advanced DRAM products (think 64Gb DDR5 chips, DDR6 DRAMs, next-generation HBM, etc.) using EUV-enabled production nodes.

"Micron will leverage the diverse, highly educated and skilled talent in New York as we look to build our workforce in the Empire State," said Sanjay Mehrotra, chief executive of Micron. "This historic leading-edge memory megafab in Central New York will deliver benefits beyond the semiconductor industry by strengthening U.S. technology leadership as well as economic and national security, driving American innovation and competitiveness for decades to come."

Source: Micron

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  • RedGreenBlue - Tuesday, October 11, 2022 - link

    You also ignored any tax advantages they’ll get which effects their margins, ROI and amplifies the debt they can take on.
  • RedGreenBlue - Tuesday, October 11, 2022 - link

    “Assuming they massively lose revenue” what are you talking about? If it’s sarcasm then hey sure that’s funny but AnandTech is a serious place and not appropriate for those numbers and sarcasm. Equities are a hedge against inflation. If you don’t know that then you’re not likely to pass a securities-law exam in the United States to be an investment advisor. Revenue will go up with inflation if they match previous market performance. So that means at the current revenue they would be bringing in around $600 billion over those 20 years. Not 400.
    This post was like an exam question in a business finance class that concludes, “Why is this assessment wrong?”
  • RedGreenBlue - Tuesday, October 11, 2022 - link

    *after accounting for inflation the $600 billion in cumulative revenue would be like $800 billion after 20 years.
  • RedGreenBlue - Tuesday, October 11, 2022 - link

    Congrats you were off by a factor of 2. You really know long term finance. You should work for Lehman Brothers.
  • RedGreenBlue - Tuesday, October 11, 2022 - link

    Market cap doesn’t say much about loan qualification. It’s basically irrelevant.
  • RedGreenBlue - Tuesday, October 11, 2022 - link

    It also doesn’t do much for valuation.
  • block2 - Monday, October 24, 2022 - link

    They build over 20 years or slower, likely financed with 30 year loans.
  • meacupla - Monday, October 10, 2022 - link

    This is a more sensible location for a chip fab.
    It's got plenty of fresh water. It runs off of the highly reliable NPCC electrical grid. It's not prone to tornadoes or hurricanes. It's in close proximity to a highly skilled labor force.
  • Samus - Monday, October 10, 2022 - link

    I'm always surprised to see companies build outside of the Northeastern United States just for this reason. Historically (and currently) many tech companies have manufactured their electronics in this region, going back a century to the likes of RCA and GE, to more recent examples such as IBM, GloFo and Intel (who had been in negotiations to acquire GloFo for a year) adding to the already large footprint of fabs in the area.
  • webdoctors - Monday, October 10, 2022 - link

    Could it be environmental regulations? Wastewater or other toxins might need to be cleaned up in the NE whereas other States might be more lax about it?

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