American memory chip giant Micron Technology, which has not built a new fab in the US for 20 years, is expected to step up its construction of new manufacturing facilities in New York state after securing an estimated US$6.1 billion in government grants, with the facilities to focus on AI memory chips.
Micron's subsidy case is expected to be officially announced this week by the US Department of Commerce, following announcements concerning Intel, TSMC, and Samsung Electronics receiving semiconductor subsidies of US$8.5 billion, US$6.6 billion, and US$6.4 billion, respectively, under the 2022 CHIPS and Science Act. This act earmarks US$39 billion in direct semiconductor subsidies, along with US$750 billion in loans and loan guarantees, aimed at revitalizing American chip manufacturing and reversing the decades-long trend of chip manufacturing shifting to Asia.
According to reports from The Register and Seeking Alpha, Micron has committed to investing in a new fab in its home state of Idaho and embarking on a US$100 billion expansion project in New York state, where it plans to construct four new plants, with these construction endeavors primarily fueled by the subsidies and other incentives provided by the Chips Act.
The groundbreaking ceremony for the new fab in Idaho took place in 2022, with commercial production slated for 2025. While construction on the new facilities in New York state has not yet commenced, it is expected to begin after the company secures a combination of sufficient Chips Act grants, investment tax credits, and local incentives to address the disparities compared to overseas expansion, as recently hinted by company CEO Sanjay Mehrotra.
The Biden administration sees Micron's new mega memory wafer facilities in New York as a bigger deal than its Idaho fab. New York Senator Chuck Schumer, now the Senate Majority Leader, even compared Micron's investment to the Erie Canal's historical significance, emphasizing its role in connecting the US to global tech manufacturing. Interestingly, Schumer recently revealed to the media, before any official announcement, that Micron's US$100 billion New York project would get at least US$6.1 billion in construction subsidies for the first two fabs.
US DRAM production capacity to rise notably
Micron's capital expenditures are far lower than those of Korean manufacturers. However, with memory manufacturers increasingly expanding operations in the US and a surging demand for DDR5 and HBM from generative AI, DRAM production capacity in the US – initially just a single-digit fraction of the global share – is expected to notably increase with investments from Micron and SK Hynix.
Nvidia, a key customer of SK Hynix, is anticipated to maintain strong demand for HBM. Its H100 GPUs drove the initial surge in demand for HBM3E, and with the upcoming launch of the H200 in the second quarter of 2024 and the B100 coming later this year, that demand is expected to further increase.
The H100 is anticipated to utilize 80GB of 12-layer HBM3 (24GB), while the H200 and B100 are set to employ 144GB (24GBx6) and 288GB (36GBx8) of 8-layer HBM3E, respectively. SK Hynix is prioritizing the 8-layer HBM3E segment, which is expected to gain popularity in 2024, to bolster its market position.
In 2025, Micron and Samsung Electronics are expected to bolster their positions in the HBM3E market, driving overall market growth. This expansion will be fueled by AMD, hyperscale cloud service providers, and AI startups transitioning from HBM2E and HBM3 to HBM3E.
This transition highlights the dynamic nature of the HBM market, showcasing the strategic endeavors of key players to address the increasing demand for advanced memory solutions in the HPC and AI technology sectors.
While SK Hynix maintains a dominant position in the HBM market, Micron CEO Sanjay Mehrotra has expressed his anticipation that Micron's HBM share will match its overall DRAM bit share by 2025. The Information Network report estimates this share could surge from its current single-digit percentage to approximately 15%, generating revenues of US$2.5-2.6 billion.
Article translated by Willis Ke
