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Government Incentives | 12 Months Ended
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Aug. 29, 2024
Government Assistance [Abstract] |
Government Incentives | Government Incentives We receive incentives from governmental entities primarily in India, Japan, Singapore, Taiwan, and the United States principally in the form of cash grants and tax credits. These incentives primarily relate to capital expenditures, have initial terms ranging from one year to 15 years, and may be subject to reimbursement if certain conditions are not met or maintained. The conditions attached to these incentives require us to incur expenditures related to the construction of new manufacturing facilities, the purchase and installation of specialized tools and equipment, R&D expenditures, and/or maintain certain levels of fixed asset investment or employee headcount during the incentive terms. The line items on the balance sheet affected by government incentives were as follows:
As of | August 29, 2024
Receivables | $ | 834 |
Other noncurrent assets | 188 |
Noncurrent unearned government incentives | 550 |
Beginning in 2023, we receive a 25% investment tax credit on qualified investments in U.S. semiconductor manufacturing under the CHIPS Act. As qualified investments are made, we recognize investment tax credits in receivables or other noncurrent assets. We have signed a non-binding preliminary memorandum of terms with the U.S. Department of Commerce for up to $6.1 billion in direct funding under the CHIPS Act for our planned fab in Boise, Idaho and the first two planned fabs in Clay, New York. We are also eligible for federal loans up to $7.5 billion. We have also signed a non-binding term sheet with the state of New York that provides up to $5.5 billion in funding for the planned four-fab facility over the next 20-plus years through a combination of tax credits for qualified capital investments and incentives for eligible new job wages. In addition to the receivables and other noncurrent assets in the table above, as of August 29, 2024, we had aggregate commitments from various governmental entities of up to $3.4 billion to be received through 2033, subject to achievement of certain performance conditions. The commitment amount includes $1.8 billion (150 billion Indian rupees) for the construction of a new assembly and test facility in Gujarat, India. We will receive incentives representing 50% of the total project cost from the Indian central government and 20% of the total project cost from the state of Gujarat. The commitment amount also includes up to $1.3 billion (188 billion Japanese yen) from the Japanese Ministry of Economy, Trade and Industry to support the production of DRAM using EUV lithography in Hiroshima, Japan. Government incentives related to capital expenditures have reduced property, plant and equipment by $2.34 billion as of August 29, 2024, of which $1.10 billion pertained to 2024 expenditures. In 2024, operating income (loss) benefited by $588 million (approximately 85% in COGS and 15% in R&D) from government incentives recognized as a reduction of expense.

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