Micron to build the world’s largest semiconductor facility in the US

Chipmaker Micron Technology revealed on Tuesday ambitious plans to develop a $100-billion computer chip factory complex in upstate New York, in a bid to boost domestic chip manufacturing and possibly deal with a worrying chips shortage. The money will be invested over a 20 year period, according to Reuters.

The world's largest semiconductor fabrication facility

Micron claims the project will be the world's largest semiconductor fabrication facility and will create nearly 50,000 jobs in New York alone. Currently, the largest semiconductor manufacturers in the world are: Intel Corp., Samsung, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), SK Hynix, Micron Technology Inc., Qualcomm, Broadcom Inc., and Nvidia.

The chip shortage first became apparent in 2020, when many chip-making factories, called foundries, closed due to the COVID-19 virus. At the same time, the virus was changing the habits of people worldwide.

People stuck in their homes invested heavily in new computers for themselves or for their children who were learning from home. Unable to go out to movie theaters or restaurants, many people opted to buy new televisions or game consoles, and with working and learning from home came the need to stay connected. This led to increased sales of phones, especially new 5G-enabled phones, and with this development surfaced a worrying chip shortage.

Factories could simply not produce chips fast enough for demand.

Samsung, the world’s second largest chip producer, told the BBC in August of 2021 that it might have to skip the launch of its next Galaxy Note smartphone. Samsung's mobile chief and Co-CEO Koh Dong-jin told a shareholder meeting at the time that, "there's a serious imbalance in supply and demand of chips in the IT sector globally."

Fixing a global chip shortage

Can Micron fix this situation? It can definitely try.

The firm has announced a first phase investment of $20 billion planned by the end of this decade. The news comes about as US President Joe Biden signed the CHIPS and Science Act in August of 2022, providing $52.7 billion in subsidies for U.S. semiconductor production and research to boost competitiveness with China.

The development has since seen chip deals pop up such as a partnership between Intel Corp and Canada's Brookfield Asset Management to jointly fund up to $30 billion for chip factories in Arizona that was signed just a month after the act came into effect.

Meanwhile, Biden on Tuesday welcomed the news from Micron calling it "another win for America" and stating that the new production facility would create "tens of thousands of good paying jobs."

The move will hopefully allow both cell phone and car makers to have the chips they need to meet all their production demands. No news has yet been reported on how many chips will be delivered by Micron’s new facility but considering the current state of availability any added resources are welcome. Could Micron help solve the global chip shortage?