Micron, a global leader in semiconductor technology, has announced plans to establish a state-of-the-art chip manufacturing campus in central New York. The project is set to receive a substantial investment of up to$100 billion over the next two decades. Micron has applied for funding under the US Commerce Department's$39 billion 'Chips and Science' semiconductor subsidy program, and a mandatory environmental review is required if the company receives funding under the program. 

Four fabrication units have been planned, along with other facilities, such as a childcare and healthcare centre, with the aim of making two of the planned units operational by 2029. Micron, in a recent statement, said that the recent government notice issued for conducting an environment review constitutes an important step in the construction process, as dictated by federal law. The review is expected to take a few months, with a draft environmental impact statement available for public comment for 45 days before finalisation. 

The Commerce Department announced a financial reward of$162 million to Microchip and another$35 million to BAE systems for establishing chip manufacturing facilities. However, Commerce Secretary Raimondo has stated that companies should expect fewer subsidies than originally sought under the program, as the Department is prioritising projects that would be operational by 2030, resulting in some tough negotiations between the Department and the chip manufacturing companies. 

Why does this matter?

The USA aims to establish leadership and supremacy in the chips supply chain, which has now become increasingly critical with the advent of the AI revolution. While the United States does design chips and develop large LLM models, it is not yet able to make and package advanced chips for AI development, as stated by Raimondo. A strong foundation in chip-making is critical for US national security interests as well as to offset increasing technological competition from China.