Micron Technology is investing over $600 million in a packaging facility in China. The move could be interpreted as an attempt to garner favor with Beijing, coming just weeks after China’s cybersecurity regulator prohibited infrastructure providers from purchasing Micron products on security grounds.
Semiconductors have become a critical battleground in the trade conflict between the United States and China, with Washington prohibiting many companies from doing business with Far Eastern clients.
Separately, Micron is rumored to be on the verge of announcing a new $1 billion packaging facility in India, indicating that the company may be eyeing a future in which China plays a lesser role in product manufacturing.
Micron is the third largest corporation in the DRAM memory market, behind Samsung and SK Hynix, both of which are South Korean.
Micron’s China investment in semiconductors will create employment.
Micron disclosed its investment intentions in a post on the Chinese messaging application WeChat. “This investment project demonstrates Micron’s unwavering commitment to its China business and team,” said Micron CEO Sanjay Mahotra.
It will expand and enhance the company’s semiconductor packaging facility in Xian, Shaanxi Province, China.
It intends to purchase packaging equipment from a subsidiary of Taiwan-based Powertech Technology located in Xian, and will establish a new production line to manufacture mobile DRAM, NAND, and SSD.
The investment will strengthen the site’s packaging and testing capabilities and create 500 new positions, according to the statement. Micron will also offer employment contracts to 1,200 Powertech employees, bringing its total Chinese personnel to 4,500.
The statement makes no mention of the sanctions imposed by the Chinese government on Micron last month. The company failed a “network security review” after a security audit, and as a consequence, Chinese infrastructure providers are prohibited from purchasing Micron chips.
No information was provided regarding the nature of these hazards or whether Micron would have the opportunity to mitigate them. The company predicted that the decision would have a single-digit impact on its revenue, as the majority of its Chinese customers are consumer electronics companies that are exempt from the prohibition.
China’s decision to impose sanctions on Micron was widely interpreted as retaliation for the United States’ ongoing efforts to strangle Chinese industries by cutting off the supply of cutting-edge electronics.
Companies such as Nvidia and AMD are prohibited from selling their most advanced artificial intelligence processors to Chinese customers, and ASML, the world’s only supplier of advanced chipmaking equipment, is limited in what it can dispatch to Beijing due to U.S. export restrictions.
Micron is prepared to invest $1 billion in India?
Micron is reportedly willing to invest $1 billion in a new packaging facility in India.