Micron to Invest $200B in US Chip Production, Meet 40% DRAM Demand

Micron Technology plans to invest $200 billion in the US to produce 40% of its DRAM memory chips domestically. The company will build two large fabs in Idaho, four in New York, and expand a fab in Virginia. This investment is expected to strengthen the US leadership in industries like AI, automotive, aerospace, and defense. Analysts have a Strong Buy consensus rating on MU stock with a price target of $126.15 per share, implying 9% upside potential.

Memory chip maker Micron Technology (MU) announced on Thursday a significant investment of $200 billion in the United States to bolster its semiconductor manufacturing and research and development (R&D) capabilities. The company plans to produce 40% of its DRAM memory chips domestically, which will involve building two large fabs in Idaho, four in New York, and expanding a fab in Virginia [1].

The investment, which includes approximately $150 billion for domestic memory manufacturing and $50 billion for R&D, is expected to create around 90,000 direct and indirect jobs [2]. Micron has already received federal, state, and local funding, including up to $6.4 billion from the CHIPS and Science Act, to support these initiatives [1].

The planned facilities will allow Micron to bring advanced high-bandwidth memory (HBM) manufacturing to the US, a key component in AI data centers. Nvidia (NVDA) CEO Jensen Huang expressed excitement about the collaboration, stating that Micron's leadership in high-performance memory is crucial for enabling the next generation of AI breakthroughs [1].

Micron CEO Sanjay Mehrotra emphasized that this investment will reinforce America's technological leadership, create tens of thousands of American jobs, and secure a domestic supply of semiconductors—critical to economic and national security [1].

The Trump administration, and the Biden administration before it, has made onshoring semiconductor manufacturing a key component of its domestic agenda. This move follows similar announcements by other major corporations, such as Intel (INTC), TSMC (TSM), and Apple (AAPL), which have also pledged billions of dollars in investments to expand their US manufacturing capabilities [2].

Analysts have given Micron Technology a Strong Buy consensus rating on its stock with a price target of $126.15 per share, implying a 9% upside potential [2].

References:
[1] https://finance.yahoo.com/news/micron-to-invest-200-billion-in-us-memory-facilities-135800900.html
[2] https://www.investopedia.com/micron-technology-to-spend-usd200b-to-boost-domestic-chip-production-11753272