A new $15-billion factory in Idaho will ensure that the U.S. is more insulated from changes in the semiconductor market.
Key Details
- Micron, one of the largest U.S. chipmakers, plans to invest $15 billion in a new factory located in Boise, Idaho. The company held a groundbreaking ceremony Monday.
- Construction on Micron’s new factory will begin in 2023. When completed, it will be the largest chipmaking cleanroom, or fabrication room, in the U.S. at 600,000 square feet.
- By 2025, parts of the factory will be operational and the factory will continue to expand in phases. When completed, the facility is estimated to create 17,000 jobs.
Why it’s news
After chip shortages during the pandemic, the U.S. and Europe have been working to decrease reliance on chip producers, currently predominantly based in Asia. Semiconductor producers have also been looking to diversify their locations to avoid region-specific delays in production.
Micron isn’t the only manufacturer looking for more work space. Other chip-making companies like Intel have been increasing their production facilities in the U.S.
The increased activity in the U.S. may in part be due to the CHIPS and Science Act, signed by President Joe Biden in early August. The bill dedicates $52.7 billion to semiconductor research and development and encourages U.S. based production.
Despite increased demand during the pandemic, it doesn’t seem that the high level of demand is here to stay.
A drop in demand for electronics has surprised some chip manufacturers who had previously enjoyed the high levels of demand when electronics were popular during the pandemic.
Previous projections had forecasted global chip sales to grow 16.3% this year. Now that estimate is at 13.9%, The Wall Street Journal reports.
The following year, chip sales are expected to grow by 4.6%, less than the previously forecasted 5.1% increase.
