Feed: AnandTech
Feed Link: https://www.anandtech.com
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Title: Micron: U.S. Fabs Will Start Operating in 2026 ΓÇô 2029

Date: Thu, 27 Jun 2024 09:00:00 EDT
Link: https://www.anandtech.com/show/21459/micron-u...

When Micron announced plans to build two new fabs in the U.S. in 2022, the
company vaguely said both would come online by the decade's end. Then, in
2023, it began to optimize its spending, which pushed production at these
fabrication facilities. This week, the company outlined more precise
timeframes for when its fabs in Idaho and New York will start operations:
this will happen from calendar 2026 to calendar 2029.

"These fab construction investments are necessary to support supply growth
for the latter half of this decade," a statement by Micron in its Q3 FY2024
financial results report reads. "This Idaho fab will not contribute to
meaningful bit supply until fiscal 2027 and the New York construction capex
is not expected to contribute to bit supply growth until fiscal 2028 or
later. The timing of future [wafer fab equipment] spend in these fabs will be
managed to align supply growth with expected demand growth."

Micron's fiscal year 2027 starts in September 2026, so the new fab near
Boise, Idaho, is set to start operations between September 2026 and September
2027. The company's fiscal 2028 starts in September 2027, so the fab will
likely begin operations in calendar 2028 or later, probably depending on the
demand for DRAM memory in the coming years. That said, Micron's U.S. memory
fabs will begin operations between late 2026 and 2029, which aligns with the
company's original plans.

Construction of the fab in Idaho is well underway. In contrast, construction
of the New York facility has yet to begin as the company is working on
regulatory and permitting processes in the state.

Micron's capital expenditure (CaPex) plan for FY2024 is approximately $8.0
billion, with a decrease in year-over-year spending on wafer fabrication
equipment (WFE). In Q4 FY2024, the company will spend around $3 billion on
fab construction, new wafer fab tools, and various expansions/upgrades.

Looking ahead to FY2025, the company plans a substantial increase in capex,
targeting a mid-30s percentage of revenue to support various technological
and facility advancements. In particular, it expects its quarterly CapEx to
average above the $3 billion level seen in the fourth quarter of FY2024,
which means that it plans to spend about $12 billion in its fiscal 2025,
which begins in late September.

Half or more of the total CapEx increase in FY2025 (i.e., over $2 billion)
will be allocated to constructing new fabs in Idaho and New York. Meanwhile,
the FY2025 CapEx will significantly rise to fund high-bandwidth memory (HBM)
assembly and testing and the construction of fabrication and back-end
facilities. This increase also includes investments in technology transitions
to meet growing demand.

"Fab construction in Idaho is underway, and we are working diligently to
complete the regulatory and permitting processes in New York," said Sanjay
Mehrotra, chief executive officer of Micron, at the company's conference call
with investors and financial analysts (via SeekingAlpha). "This additional
leading-edge greenfield capacity, along with continued technology transition
investments in our Asia facilities, is required to meet long-term demand in
the second half of this decade and beyond. These investments support our
objective to maintain our current bit share over time and to grow our memory
bit supply in line with long-term industry bit demand."

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