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Micron considering new US memory chip factory as it gears up spending

Micron considering new US memory chip factory as it gears up spending

FILE PHOTO: The logo of U.S. memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach

Micron Technology Inc said on Wednesday it is considering building a new memory factory in the United States but that state and federal subsidies will be needed to offset costs that are higher than its factories in Asia.

The Boise, Idaho-based company is the only American firm that makes both key types of memory chips, competing against South Korea's Samsung Electronics Co Ltd and SK Hynix and Japan's Kioxia, Toshiba's former memory chip unit.

Micron has pilot manufacturing lines for developing new technologies at its Idaho headquarters and a factory in Virginia that turns out special high-reliability chips for automobiles. But its most advanced memory chips, which go into devices including PCs, phones and data centers, are made in Taiwan, Japan and Singapore.

Sumit Sadana, Micron's chief business officer, told Reuters memory chips are about 30per cent of the global semiconductor market but only 2per cent are made in the United States.

"We certainly want to very seriously assess manufacturing in the U.S., because the U.S. ought to have more than 2per cent of memory manufacturing for the sake of national security and for the sake of supply chain resiliency," Sadana said in an interview.

Sadana said the company has not settled on a country for its next factory for advanced chips. The factories will require tools such as ASML Holdings' extreme ultraviolet (EUV) lithography machines, which can cost more than US$100 million each.

Micron plans to spend up to US$12 billion in capital expenditure and US$3 billion on research and development next year, Sadana said, and up to US$150 billion over the next decade.

Micron estimates costs for memory manufacturing are 45per cent higher in the United States than in Asia, Sadana said.

He said Micron's decision will depend on whether U.S. subsidies for buildings factories and investment tax credits for expensive tools - both of which are being debated in the U.S. Congress - are put in place.

"We need these policies to be stable and bipartisan in nature," he said.

(Reporting by Stephen Nellis in San Francisco; Editing by Lincoln Feast.)

Source: Reuters

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