Chip group announces major investment in the USA

Micron facility in Virginia, USA

The chip group wants to invest a total of 40 billion dollars in the USA.

(Photo: AP)

Munich The USA’s race to catch up in semiconductor production is gaining momentum: Micron will set up factories in the United States for 40 billion dollars by the end of the decade, the US manufacturer announced on Tuesday. State-of-the-art memory chip factories would be built in several steps.

The group is counting on subsidies from the largest aid package that the chip industry has ever received in America. US President Joe Biden on Tuesday paved the way for the so-called “Chips and Science Act”, which is intended to bring $52 billion to the industry. In addition, manufacturers can expect tax breaks if they expand in the USA.

It’s not the only investment Biden can claim as a success. The American contract manufacturer Globalfoundries announced on Monday that it was expanding its plant in the US state of New York. This is part of an agreement with the Californian cell phone chip specialist Qualcomm, who wants to produce even more than before at Globalfoundries.

America acts, Europe debates

The US is one step ahead of Europe. The EU has been discussing its own “Chips Act” for months, but a decision is not expected before the end of the year. With the law, the EU Commission wants to enable state support of a good 40 billion euros.

Top jobs of the day

Find the best jobs now and
be notified by email.

The US Chips Act is “an important step in consolidating America’s leadership position in the semiconductor industry,” said Micron CEO Sanjay Mehrotra. The law enables his company to increase domestic memory chip production from less than two percent to up to ten percent of the world market over the next ten years. This would make the United States “the home of the most advanced memory chip manufacturing and research and development in the world.”

graphic

Micron does not spend more money than planned. The group announced last year that it would spend 150 billion dollars on plants and research over a decade. But instead of going to Asia, the money is going to the US. To date, Micron has mainly produced in Japan, Taiwan and Singapore. According to Micron, the new building would create 40,000 jobs in the USA – 5,000 of them directly in the factory.

Micron does not want plants in Europe

The Micron boss recently ruled out investments in European plants in a conversation with the Handelsblatt. Additional factories would be built in Asia and America, where the group is already represented. Because it is important to use economies of scale in order to produce as cost-efficiently as possible.

>>Read here: Up to 750,000 euros for site management: This is what the first job advertisements at Intel in Magdeburg look like

In view of the supply bottlenecks of the past two years, both America and Europe have resolved to become less dependent on Asia. So far, the USA has been doing better. The world’s largest chipmakers, Samsung and Intel, are building advanced factories in the country. TSMC, the leading global contract manufacturer from Taiwan, is also investing there.

The largest investment planned in Europe is two Intel plants in Magdeburg. They should cost 17 billion euros. In addition, Globalfoundries and STMicroelectronics are planning a joint factory in France. TSMC, meanwhile, is reluctant to make a commitment. And the Munich chip manufacturer Infineon decided in the spring to build in Malaysia.

When it comes to memory chips, everything looks as if Europe will continue to be dependent on overseas suppliers in the future. Micron is the number three producer. Samsung and SK Hynix of South Korea are leaders in the business. In 2009, Qimonda, the last German provider, went bankrupt.

Bad prospects for Micron

“We are the only producer of memory and data storage in the western hemisphere,” Mehrotra told Handelsblatt. In the past, the manager has repeatedly requested subsidies from the US government in order to be able to invest in America. Because the costs in the USA are up to 45 percent higher than in Asia.

Now the head of the company gets the grants, but can take its time with the laying of the foundation stone. Because business is not going well. The group will possibly miss the lower end of its own forecast in the current quarter, Micron announced on Tuesday. The fourth quarter of the fiscal year lasts until the end of August. In the next quarter, sales and margins would drop significantly.

More: Why the Taiwan conflict is so dangerous for the German economy

source site-15