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Micron will receive over $6 billion in government grants to boost domestic production.

President Joe Biden will travel to upstate New York on Thursday to tour a semiconductor facility and promote his administration’s efforts to bring chip manufacturing back to America.

Ahead of the trip, the Commerce Department announced that it had reached a preliminary agreement with Micron, an American memory chipmaker.

According to the deal, the company will receive $6.14 billion in direct funding through the CHIPS and Science Act, which was signed into law by President Biden in 2022.

Besides the grant, the company will be eligible to receive up to $7.5 billion in loans as part of the incentive package to boost domestic chip manufacturing.

Senate Majority Leader Chuck Schumer (D-N.Y.) praised the deal, stating that “the future will be built in Syracuse, New York, not in Shanghai, China.”

“For years, communities that built America, like upstate New York and Syracuse, experienced the pain of so much loss of manufacturing, hemorrhaging jobs to places like China,” he said during a call with reporters ahead of the president’s trip.

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The company will use the government incentive to construct two fabs in Clay, New York, and one fab in Boise, Idaho, generating $50 billion in private investment by 2030, according to the White House.

Over the next two decades, Micron is committed to investing up to $125 billion across both states to “build a leading-edge memory manufacturing ecosystem,” the White House said.

This will be the largest private sector investment in the history of New York and Idaho.

According to Lael Brainard, director of the White House National Economic Council, this investment will “mark a new chapter in the U.S. leadership of semiconductors.”

“Nearly all of that manufacturing takes place in Asia, but thanks to the CHIPS program, Micron is committed to bringing leading-edge memory manufacturing here to America for the first time in over 20 years,” she told reporters during the call.

The COVID-19 pandemic exposed the fragility of global supply chains, as well as the vulnerability of the United States to business disruptions.

During the pandemic, there was an unprecedented surge in demand for consumer electronics, resulting in a shortage of semiconductor chips. Automakers were hit especially hard by the supply shortages.

The CHIPS and Science Act provides $53 billion in subsidies to support the construction of semiconductor plants across the country and reduce reliance on imported chips.

Micron has become the seventh company to receive incentives under the CHIPS and Science Act. So far, the government has provided $29 billion in grants overall, which will generate $348 billion in private sector investment, Ms. Brainard said.

“That’s $12 of private investment for every $1 of public investment, a great investment for America,” she said.

Micron’s project in Idaho, currently in the construction phase, is expected to become operational in 2026. The first factory in New York will be ready for production in 2028, followed by the second factory in 2029.

The investment is expected to create over 20,000 construction and direct manufacturing jobs and tens of thousands of indirect jobs, according to the White House.