Trump said at debate that ‘we hardly make chips anymore.’ But what about Micron? And Boise?

BOISE – If you tuned in to the presidential candidates’ debate Tuesday, you might have been surprised to hear former President Donald Trump claim that “we hardly make chips anymore.”

That was a noteworthy comment in Boise, the home of Micron Technology Inc., Idaho’s largest for-profit employer and the nation’s largest maker of memory, one class of semiconductor chips. But there’s truth in Trump’s assertion.

“The share of modern semiconductor manufacturing capacity located in the U.S. has eroded from 37% in 1990 to 12% today,” said the Semiconductor Industry Association, which represents U.S. semiconductor makers.

The U.S. has fallen to fourth in semiconductor production, trailing No. 1 Taiwan, No. 2 South Korea and No. 3 Japan and leading No. 5 China, according to World Population Review.

But U.S. companies still hold 46% of worldwide semiconductor market share, in large part because they – including Micron – own and operate fabrication plants, or fabs, abroad, where labor is cheaper and where governments sometimes subsidize them. And, as the World Population Review notes, chips from a U.S. company’s fab in Taiwan or Japan count as chips from that country, but profits count as part of the U.S. economy.

Those profits vary with seasonal sales and changing market conditions but are generally healthy. Micron reported $332 million in profits on sales of $6.8 billion in its latest quarter.

Trump and Vice President Kamala Harris didn’t mentioned the U.S. share of production is almost certain to grow, thanks to Congress’ decision to provide big government subsidies to companies to build domestic fabs.

Chips Act spurs domestic production

The Chips Act, signed by President Joe Biden in August 2022, authorized billions in subsidies to bolster domestic semiconductor manufacturing. Since then, investments in U.S. chipmaking have never been higher, especially in Boise.

Micron alone secured $6.1 billion from the federal government to help pay for the construction of its costly new plants in the City of Trees and New York state – two massive projects that the company has said represent the biggest investment in memory manufacturing in U.S. history. The cranes being used now to build the fab on Micron’s southeast Boise campus are seen from nearby Interstate 84.

When the Chips Act passed, CEO Sanjay Mehrotra said the legislation would enable Micron to grow domestic memory production from less than 2% to up to 10% of the global market over the next decade, making the U.S. “home to the most advanced memory manufacturing and R&D in the world.”

That bill was passed with bipartisan support. The entire Idaho congressional delegation, all Republican, voted against the bill, but Sen. Jim Risch said that was because it authorized spending for other projects besides semiconductors. He said all four members thought the bill would pass anyway, and if it didn’t, they could pass a stand-alone bill with the $52 billion it authorized for the semiconductor industry.

Trump laments countries ‘ripping us off’

The remark Trump made early in the debate was spurred by an exchange between him and Harris on trade policy.

Trump had touted his proposed tariffs on foreign nations and said China and other countries “have been ripping us off for years.” Harris responded by highlighting the trade deficit that climbed during Trump’s tenure in the White House, saying that he “invited trade wars” and “ended up selling American chips to China to help them improve and modernize their military.”

When Trump then said the U.S. barely makes chips anymore, Harris said off-mic: “That’s not true,” McClatchy’s Michael Wilner reported.

Micron declined to comment on Trump’s remark.

Micron ended chipmaking in Boise

Once IBM, Texas Instruments, Motorola, Intel and others made dynamic random-access memory in the United States. Today Micron is the only surviving U.S. DRAM manufacturer. Its principal competitors are Samsung and SK Hynix.

Most of Micron’s chips are made overseas, but it does have a DRAM plant in Manassas, Virginia. Micron manufactured chips in Boise from the company’s founding in 1978 until 2009, when it closed the last Boise fab still making the round wafers from which memory chips are cut and sold.

In the 15 years since, Micron’s corporate campus on South Federal Way has become a research, development and administrative center that employs scientists and engineers from around the world.

The U.S. has other semiconductor manufacturers that make chips for purposes other than memory. For example, Intel makes processing chips and has fabs in Arizona, New Mexico and Oregon. Texas Instruments has fabs in Texas.

Chip-related construction spending booms

Data from the U.S. Department of the Treasury shows that a recent boom in construction spending for manufacturing facilities is driven by demand for advanced chip technology.

Spending on construction for computer, electronic and electrical manufacturing has nearly quadrupled since the beginning of 2022, according to the Treasury. It said policies like the Chips Act, which provided funding and tax incentives for the construction of semiconductor manufacturing plants, contributed to the surge in spending.

Construction for computer, electronic and electrical manufacturing was only a small fraction of the manufacturing construction over the past few decades. Now, it’s a key component.

The Semiconductor Industry Association has an online map that shows the breadth of the industry, including locations where chips are designed and fabricated, and where research and development takes place. Dozens of new projects and expansions have cropped up across the U.S.

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