Biden, seeking to build on a productive week, will announce billions in grants for chips

President Biden, building on a week of favorable political developments, plans to announce Thursday that his administration will award up to $6.1 billion in grants to Micron Technology, the latest federal award aimed at shoring up the nation's domestic supply of semiconductors.

Micron will use the grants to help build two advanced chip manufacturing plants in New York and another facility in Idaho, Biden administration officials said before the president's trip to Syracuse, New York, to make the announcement. The federal government will also provide up to $7.5 billion in loans to Micron.

The funding stems from the CHIPS Act, which a bipartisan group of lawmakers passed in 2022 to reestablish the United States as a leader in the production of semiconductors, the tiny components that power everything from phones and computers to cars and fighter jets. The legislation gave the Commerce Department $39 billion to distribute in grants to incentivize chipmakers to build and expand manufacturing plants across the United States.

Although Senator Chuck Schumer, Democrat of New York, announced the grant last week, Mr. Biden's trip will give him a chance to celebrate another victory in what appears to be a successful week for him. On Wednesday, he won the endorsement of North American construction trades unions, largely due to his bipartisan infrastructure package. He is also on the verge of signing a $95.3 billion aid package for Ukraine, Israel and Taiwan after months of stalemate in Congress, reaffirming the main focus of his foreign policy agenda.

As he prepares to boost his efforts to boost manufacturing in Syracuse, Biden's 2024 Republican opponent, former President Donald J. Trump, will be in court just 200 miles southeast of New York City, as his state's criminal. The trial continues on charges of falsifying business records.

Boosting domestic chip production is a key goal of Mr. Biden, whose economic policy agenda focuses largely on boosting American manufacturing and bringing back jobs that have moved abroad in recent decades. Only about 10 percent of the world's semiconductors are currently manufactured in the United States, down from about 37 percent in 1990.

More than a year ago, Micron announced plans to expand manufacturing in the United States. In October 2022, Micron said it would build a giant industrial park near Syracuse, starting with a $20 billion project by the end of the decade and spending up to $100 billion over the next two decades or more. The previous month, Micron said it would build approx A $15 billion factory in her hometown, Boise, Idahothe first new memory chip factory in the United States in 20 years.

As part of their new announcement, federal officials said Micron now plans to spend $50 billion to develop the first three plants over the next six years, and that the company will invest up to $125 billion in the United States over the next 20 years or more. The company said it could build up to four manufacturing plants in New York.

Micron's award brings the total announced federal grants to more than $29 billion. Earlier this month, US officials gave Samsung up to $6.4 billion in grants. Other major chipmakers — including Taiwan Semiconductor Manufacturing Corp. and Intel — also received awards recently. GlobalFoundries, Microchip Technology and BAE Systems received the top three awards.

Micron is also expected to receive federal tax credits that could cover 25 percent of the cost of building and equipping factories with production equipment. Senior Biden administration officials said the Idaho plant is expected to be ready for production in 2026. The first plant in New York is expected to open in 2028, with the second being ready for production in 2029.

Federal officials said the grant would help stimulate Syracuse's economy, calling it part of Biden's commitment to revitalizing communities long overlooked by federal investment.

The region was a manufacturing center around World War II, when General Electric built products like radar systems for the Army, said Lael Brainard, director of the president's National Economic Council. But she said decades of “tiered economics” had led to “the loss of good jobs and reduced public and private investment.”

At least $40 million of the grant will be allocated to Micron to develop and train its workforce. On Thursday, Biden is expected to announce the creation of four new “workforce centers” in upstate New York, Michigan, Milwaukee and Philadelphia. These centers are intended to train workers and connect them to jobs created by new federal investments.

Micron is the last US supplier of chips called dynamic random access memory, or DRAM. These chips play a vital role in computers and smartphones, acting as a scratch pad to temporarily store data that needs to be retrieved frequently. Leading DRAM chips are essential for advanced technologies such as artificial intelligence and wireless communications. All of these advanced chips are currently manufactured in Asia, but administration officials said Micron's investments would allow the United States to produce its own supplies.

Micron does most of its manufacturing in Taiwan, Japan and Singapore. Sanjay Mehrotra, the company's CEO, has made an effort to boost its production in the United States and win government support for this expansion. But Mr. Mehrotra reiterated that the timing of such spending would closely track supply and demand, and reflect the company's success in winning federal grants.

“This is a historic moment for U.S. semiconductor manufacturing,” Mr. Mehrotra said in a statement. “Micron’s leading memory is key to meeting the growing demands of artificial intelligence, and we are proud to make significant investments in memory manufacturing in the United States.”

Don Clark He contributed reporting from San Francisco.