Micron Technology Inc. is set to invest up to $100 billion in a new semiconductor plant in New York, according to people familiar with the matter. The move comes as the U.S. chipmaker looks to boost its output of advanced chips used in everything from smartphones to self-driving cars. Micron is currently the world’s third-largest maker of DRAM chips, behind Samsung Electronics Co. and SK Hynix Inc. But it has been struggling to keep up with demand amid a global shortage of chips. The new plant, which is expected to be operational within two years, will help Micron meet that demand and allow it to better compete against its larger rivals. It also marks a major investment by the company in the U.S.

1. Chips are down: Micron will build a
$100 billion semiconductor factory in
response to new legislation.
The passage of the CHIPS Act will require computer memory to be produced in
the United States, and computer chip-maker Micron has decided to comply by
building a $100 billion semiconductor factory in upstate New York.
The move will create thousands of new jobs in the state, and act as an
economic stimulus that will ripple through the community and into other
sectors of the economy. It’s an excellent example of how corporate
participation can help build infrastructure and grow employment
opportunities at home.
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2. Micron announces plans to invest over $100
billion in New York.
Micron Technology, Inc. announced yesterday that it will be investing over
$100 billion in a new semiconductor factory located on the East Coast of the
United States. The company's decision was spurred by a recent congressional
bill that would increase tariffs on imported chips and thereby create an
incentive for companies to manufacture their products domestically.
Micron's announcement is significant, as it marks the first time in almost 20
years that a US-based chipmaker has planned to build a facility in this country.
At a press conference this morning with Micron CEO Sanjay Mehrotra, Andrew
Cuomo stated that this is one of the most significant economic developments
for New York City and upstate New York. Micron intends to construct a 200mm
fab in rural New York State, near Utica. Construction is expected to begin early
next year and could be operational by 2020.
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3. Micron expects that hiring 3,000 employees will take three years or less,
according to Mr. Mehrotra; the positions would largely go towards
manufacturing operations and research and development functions. We hope,
Mr. Mehrotra said, that many other American manufacturers of advanced
technology goods will follow our lead. This administration, he said, has taken
some really strong steps to provide incentives for us to bring those jobs back.
Micron's announcement comes just weeks after President Trump signed an
executive order seeking a report within 90 days from his secretary of
Commerce on how U.S. steel imports threaten national security. When asked
whether he thought the president should continue imposing tariffs against
China and others, Mr. Mehrotra demurred but noted that we're hopeful this
administration can work with China so there are no more trade wars.
How Will The Future Of Technology Shift With This Move?
Micron's commitment to building a $100 billion semiconductor factory will not
only provide high-wage jobs for the next generation of New Yorkers but will
also change the future of technology.
Micron's investment is a sign that this area still has an opportunity to create
jobs in the age of automation. The company is confident that there will be
enough talent and a need for such advanced technology to make this region a
hotbed for job creation.
It is estimated that New York state could see up to 30,000 new high-tech
manufacturing positions created as a result of this investment, which would
make it one of the largest employers in the area.
The company also pledged its commitment to education by committing an
additional $600 million to local schools and universities. Ultimately, with
more than 5% of the global memory market share, this announcement could
have major implications on the country's economic growth.
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4. As a result of recent changes in the tax law (the Tax Cuts and Jobs Act), taxes
on exports from America have been slashed from 35% to 21%. As a leading
exporter of goods overseas, these cuts represent an enormous win for
companies like Micron looking to grow their business abroad. More
specifically, with China imposing import tariffs on many U.S.-based products,
including soybeans, aircraft parts, and automobiles; U.S.-based companies can
now better compete against Chinese firms on cost when exporting to China
under these lower tax rates.
The Risks That Face This Decision
This decision is risky due to a variety of factors. One risk is that there is no
guarantee that Congress will renew the CHIP program, which provides funding
for the purchase of vaccines for low-income children. If this program does not
continue, the cost of manufacturing and research and development will likely
rise, putting more pressure on Micron's bottom line.
Another risk is that demand for DRAM may decrease due to increased
competition from China. This would mean that factories like the one being
built in New York may be producing products at a loss or at high prices; making
it difficult for Micron to break even and make a profit.
Finally, the process of building and staffing a massive facility takes time.
Building an entire chip production facility could take up to four years (which
doesn't include staff recruitment). There is always the possibility that either
Micron or another company could go bankrupt before the completion of the
facility. In addition, if something were to happen during construction—such as
a natural disaster or terrorist attack—it would be devastating both financially
and socially to Micron as well as their investors.
Micron has been trying to buy a Korean memory chip maker since late last
year, and they have also been accused of violating US trade sanctions by
exporting computer chips with military applications. So far, these allegations
have not harmed Micron's stock price, but these risks still exist.
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5. Micron had faced risks before with a potential 2008 recession back when they
opened their first plant, but they had overcome those challenges without much
difficulty. The current scenario feels different because they have never faced so
many risks at once before, including those that come with operating in the
Middle East, where political unrest poses significant threats to investments.
Although this project could bring significant growth to the region, it is only
one part of Micron's business strategy. The biggest problem with investing too
heavily in one sector or geographic location is that if anything goes wrong, the
company will struggle to remain profitable.
Why Did They Pick Upstate New York?
The company has pledged to invest a whopping $7 billion, create 2,000
high-paying jobs, and invest heavily in upstate New York's economy. This is all
thanks to the CHIPs Act, which offers tax breaks for investments of this
magnitude.
After speaking with President Trump, they have decided that it would be best
to build their factory in Upstate New York. Even though Washington, D.C. has
been home to some great companies like Amazon and Uber, President Trump
was adamant that the location should be closer to his Mar-a-Lago resort,
where he spends most weekends. He just can't resist being so close to the
source!
All joking aside, when you look at the facts, it makes perfect sense. They
already have strong supply chains in Upstate New York and an abundance of
talent at colleges nearby. We're not surprised about Micron's decision because
of all these reasons, but also because it doesn't make any sense for them not to
build their facility nearby.
This news is good for America but even better for NYS—we now have a big
manufacturing plant on our horizon that will bring so much opportunity! We
can't wait until 2020 when construction begins and 2022 when production
starts!

6. What Is The Future For Semiconductors?
The future for semiconductors is not looking very good. In the face of
increasing competition from China and other countries, there is an expectation
that American companies may soon be forced to give up their dominant market
position. The CHIPS Act was a first step toward addressing this problem, but
it's clear that more needs to be done.
The US has long been home to the most advanced semiconductor industry in
the world, and now there are calls for investments and policies that could help
maintain our lead in technology while ensuring that jobs stay stateside. The
future of America's economy will depend on how well we can protect our
technological advantage, and I hope we're up for the challenge.
How will they meet their investment goal?
In response to the CHIPS Act, Micron has pledged to build a $100 billion
semiconductor factory in New York. This is a significant investment, and the
company will need to take steps now to meet its goal. With plans for the plant
set, they'll need workers with specific skills as well as engineers and managers
who can help with operations.
They'll also need a location that's close enough for workers but far enough
away that it won't affect housing prices or other aspects of the surrounding
community. To find this spot and make sure they have everything they need
for the next decade, Micron will start by reviewing sites near their current
factories.
If those don't pan out, they'll look at rural areas where there's plenty of lands
available. What about water? The East Coast has an issue when it comes to the
water supply. It doesn't rain very often in the region, so many communities
rely on reservoirs for their fresh water supply.
Many reservoirs have been closed off from public use due to heavy drinking
habits, which means these towns may not be able to support the needs of an
incoming technology company like Micron.

7. Conclusion:
The CHIPS Act has been met with mixed reviews, and as a result, there are
mixed feelings about this venture. Some feel it is an important step forward to
improving America's competitiveness on the global stage.
Others feel that the cost of building the facility will put an undue strain on state
and local economies, forcing these communities to take out loans or levy
additional taxes on citizens just to afford the project.
The debate over this issue will likely continue for some time, but there is no
denying that this announcement from Micron will have major implications for
New York and the country as a whole. In light of recent developments, Micron
has pledged to build a $100 billion semiconductor factory in New York State.
The move comes following President Trump's signing of the bipartisan
Comprehensive Innovation and Manufacturing Act (or CHIPs Act), which cuts
taxes on computer parts purchased by American companies making products
domestically.
Specifically, up until now, many states taxed computer parts at a much higher
rate than other consumer goods such as clothing or books; this would
effectively make it cheaper to manufacture devices abroad than here at
home-putting America behind its competitors when it came to production
costs.
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