Micron Technology's planned investment of up to $100 billion in a semiconductor manufacturing facility near Syracuse, N.Y., aims to create a regional ecosystem that could help meet the demand for chips used in everything from data storage to autonomous vehicles.
Micron, along with government officials, confirmed the 20-year-plus commitment Oct. 4. The site selection, in the Syracuse suburb of Clay, follows months of negotiations as Micron evaluated locations to boost its DRAM production in the U.S. The site could eventually house four clean rooms totaling 2.4 million square feet -- what Micron called the "largest-ever clean room space announced in the U.S."
The Micron investment stands to become an early beneficiary of the CHIPS and Science Act, which President Joe Biden signed in August. The legislation, which aims to spark domestic chip manufacturing, is expected to provide federal grant dollars and tax credits to Micron's central New York facility. The ongoing chip shortage has driven up the cost of IT infrastructure for CIOs and other tech buyers, exposed the fragility of global supply chains, and sparked interest in expanding U.S. production.
Gearing up for an ecosystem
In Clay, the construction of the Micron facility is expected to begin in 2024. The chipmaker expects to hire about 9,000 people. Tens of thousands of additional workers, however, could hold jobs with associated businesses expected to move into the area.
"You'll see easily another 20 companies that will come into town," said Joe Stockunas, president of Semi Americas, an electronics industry association for the product design and manufacturing chain. His experience includes working for companies that supply equipment and materials to the semiconductor industry.
Chip manufacturing facilities, Stockunas said, require wafer fab equipment such as photolithography, chemical vapor deposition, chemical cleaning, etching and planarization, to name a few examples of gear. The companies that provide this equipment will place technical and sales personnel near a plant.
"Many of the suppliers will have very complex machines, so they'll have specific types of engineers and technicians who can be inside the fab in an hour [and] can be fixing something in four hours or less," he said.
Also located nearby will be businesses with spare parts and materials to keep the chip facility running. Beyond silicon, those materials include more than 50 types of gases and chemicals used to make integrated circuits, as well as metals such as copper and aluminum, Stockunas said.
"Companies who supply all of that equipment and all of those materials, they typically will have a team of folks who are available to support the factory," he said. "It will be a complete ecosystem."
Micron's 'gravitational pull'
Honora Spillane, senior director of business and economic development at CenterState Corporation for Economic Opportunity, said that's been the case in the Albany, N.Y., area, where semiconductor manufacturer GlobalFoundries opened a facility in 2009. Other businesses set up shop near the chip plant in Malta, N.Y.
Honora SpillaneSenior director, business and economic development, CenterState Corporation for Economic Opportunity
"We have a model we can build off of," Spillane said. CenterState, based in Syracuse, is an economic development organization that helped attract Micron to Clay. "The gravitational pull of Micron's investment is going to be incredible," she said.
Tier 1 and tier 2 suppliers, companies further down the supply chain, and a variety of service businesses such as restaurants are likely additions to Micron's orbit, Spillane said.
Planners in Syracuse, where numerous manufacturers have departed or scaled back operations since the 1970s, will now be looking for space to accommodate businesses expected to arrive.
"We are taking a deep breath this week, and we'll start looking for sites and looking for buildings," Spillane said.
Increasing capacity to meet demand
The Syracuse-area development is part of a broader buildout of chip manufacturing capacity. Two days after the Micron announcement, IBM disclosed a $20 billion investment in New York's Hudson Valley region, with the outlay focusing on semiconductor manufacturing and AI, among other areas. In addition, Micron last month unveiled plans for a $15 billion memory manufacturing center near its Boise, Idaho, headquarters.
The current chip manufacturing expansion is all about "keeping up with the demand," Stockunas said. The growing appetite for chips stems from innovations such as AI, IoT sensors used in Industry 4.0 initiatives, medical devices and automotive applications, he noted.
Autonomous vehicles, for example, will require "the fastest chips in the world," Stockunas said. But cars of all kinds use more and more sensors for a better user experience and improved economies. "For those applications, it's not necessarily the highest-tech chips, but you're going to need an awful lot of them," he said.
Worldwide semiconductor sales have increased by two and a half to three times over the last 10 years, he noted, adding that the market will soon surpass the $600 billion mark.