LEHI, Utah—Nestled at the foot of the Wasatch Mountains here, the IM Flash plant is a paragon of US high-tech manufacturing.
Robots glide along the ceiling, moving silicon wafers the size of dinner plates between hulking machines that deposit and etch microscopic layers of material to build the most advanced memory chips in the world.
For the 1,700 technicians and scientists who tend to the robots and troubleshoot problems in the delicate manufacturing process, the jobs offer generous pay and benefits and easy access to Utah’s many outdoor attractions.
For Intel and Micron Technology, the two US companies that jointly own and operate IM Flash, the venture allows both of them to sell cutting-edge, three-dimensional memory chips while sharing the multibillion-dollar costs of a modern semiconductor factory.
The memory chips produced at the plant are “probably one of the biggest advances of technology in the last 20 years,” said Jon Carter, who oversees Micron’s strategy for new memory products. And, as he was quick to point out, all of the work was done in the United States. “Micron has done a really good job of having a good footprint on the home front,” he said.
In many ways, however, the IM Flash plant is an outlier. While companies based in the US still dominate chip sales worldwide, only about 13 percent of the world’s chip manufacturing capacity was in this country in 2015, down from 30 percent in 1990, according to government data.
Chipmakers attribute the decline to a variety of forces, including high US tax rates and the hefty subsidies offered by foreign governments for new semiconductor plants, which can cost as much as $10 billion.
“It’s quite a bit more expensive to build a factory in the US,” said Stacy J. Smith, the executive at Intel overseeing manufacturing, operations and sales.
Intel—which predominantly manufactures in Oregon and Arizona but also has factories in Ireland, Israel and China—estimates that the extra cost for a US plant is more than $2 billion.
Chipmakers are hopeful that President Donald J. Trump, who has promised large corporate tax cuts and a tougher approach to trade with China, will help them.
Intel’s chief executive, Brian M. Krzanich, made a public display of his faith in the administration this month when he stood by Trump in the Oval Office to announce that the company would spend $7 billion to complete a leading-edge chip factory in Chandler, Arizona, creating 3,000 full-time jobs.
Intel said it was talking with the Trump administration and Congress about a broad corporate tax cut, as well as other ways to improve the financial incentives for chipmakers to locate new projects here. Although the United States has 76 semiconductor plants, many of them are older, and few new ones are being built.
Intel, whose work force relies heavily on highly skilled immigrants, is also pressing the administration to continue allowing such immigrants to enter the country.
“We benefit from being able to hire the best talent from around the world,” Smith said.
The chip industry spends about one-fifth of its revenue on research and development, but it wants more federal funding for basic research into fundamental problems, like how to pack transistors closer together and whether materials other than silicon could form the basis of future chips.
“We would like this administration to double down on investments in basic research in universities,” said John Neuffer, chief executive of the Semiconductor Industry Association, a trade group that represents US chipmakers. “Help us pedal faster.”
Foreign countries have become more appealing for chip manufacturers, in part, because of the rise of contract chip foundries owned by Samsung of South Korea and Taiwan Semiconductor Manufacturing Co. They have made it easy for US tech companies like Qualcomm and Apple to design cutting-edge chips in the United States but outsource production to Asia.
Looming in the background is China, which is a bit player in the industry but has committed to spend upward of $100 billion to create a world-class chip industry.
“Today, it’s a modest threat, but two, three, four years out, if China plays out as it plans, it could be very significant to subsectors of our industry,” Neuffer said.
Unlike many of their competitors, Intel, based in Santa Clara, California, and Micron, based in Boise, Idaho, build most of their chips in the United States and conduct virtually all of their research and development in this country.
The approach they have taken to 3D memory chips illustrates the complexity of the business as well as the global forces pushing on the industry.
Image credits: Jim McAuley/The New York Times