Micron to spend $150bn on memory production

Micron to spend $150bn on memory production

Business news |
By Nick Flaherty

The cash will be spent on memory manufacturing and R&D with the potential for fab expansion in the US, to meet the demand of the data-based economy.

Micron has recently agreed the sale of a wafer fab in Lehi, Utah, to Texas Instruments.

How $15bn per year will be raised and how much Micron expects the US government to contribute were not discussed. In the fiscal year to September 2, 2021, Micron made net profit $5.86 billion on sales revenues of $27.71 billion. The company’s capital expenditure budget for fiscal 2021 was about $9 billion.

Micron refers to the $150 billion spend as “the first step” and adds that “securing access to leading-edge memory is a long-term investment that also requires sustained government support.”

Micron points out that memory components represented 10 percent of total semiconductor sales in 2000 but have risen to about 30 percent of a greatly increased market in 2021.

“Memory is at the leading edge of semiconductor manufacturing and fuels everything from feature-rich 5G smartphones to the AI-enabled cloud,” said Sanjay Mehrotra, CEO of Micron, in a statement. “Micron’s leadership in both DRAM and NAND technologies and the strength of our roadmap enable us to invest more than $150 billion with confidence to extend our industry-leading memory innovation into the next decade, and deliver differentiated products to our customers. We look forward to working with governments around the world, including in the US where CHIPS funding and the FABS Act would open the door to new industry investments, as we consider sites to support future expansion.” 

Next: Asks for money

Micron said it costs 35 to 45 percent more to operate a memory wafer fab in the US than it does lower-cost markets with established semiconductor ecosystems. It added that “funding” would therefore be critical to Micron expanding in the US as part of the investment plan – presumably that means “government funding.”

Manish Bhatia, executive vice president of global operations for Micron, said: “Sustained government support is essential for Micron to ensure a resilient supply chain and reinforce technology leadership for the long term.”

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