Original author: Bao Yilong

Original source: Wall Street Insight

Micron Technology significantly expands its manufacturing investment in the U.S., increasing its previous commitment from $200 billion to $250 billion, reigniting market enthusiasm for AI-driven memory chip demand.

Micron announced on Thursday that it plans to increase the total investment in building new factories in the U.S. to over $250 billion before 2035, adding $50 billion to the previous commitment to meet the unprecedented demand for memory chips driven by the global AI boom.

The company also announced a $3 billion investment to strengthen the semiconductor supply chain, including providing $500 million in strategic financing to Taiwanese wafer supplier GlobalWafers.

The investment plan was announced at an event held outside Micron's new factory near Syracuse, New York, attended by U.S. Secretary of Commerce Gina Raimondo and other government officials. Raimondo stated at the meeting:

Outstanding companies are investing heavily in the U.S., and Micron is undoubtedly at the forefront.

This move was also supported by U.S. Trade Representative Jamieson Greer, with many White House officials viewing it as an important measure to enhance the resilience of the U.S. supply chain.

Boosted by this news, Micron's stock price briefly surged over 9%, returning above the $1,000 mark, with the chip sector strengthening across the board, and the Philadelphia Semiconductor Index rising more than 5.3% at one point.

Investment Blueprint: Achieving 40% Domestic DRAM Production by 2035

According to Thursday's announcement, Micron will advance its expansion projects in states including New York, Idaho, and Virginia, with investments continuing until 2035 to support the company's goal of producing 40% of dynamic random access memory (DRAM) products in the U.S. a decade from now.

Micron CEO Sanjay Mehrotra stated at the New York event that this investment will create over 90,000 jobs, "helping to ensure that the cutting-edge technologies that shape the future are built in the U.S."

It is noteworthy that Thursday also marked the first official concrete pouring at Micron's factory in Clay, New York, with construction progress ahead of the original schedule by one quarter.

Evercore ISI analyst Amit Daryanani pointed out in a report on Wednesday that Micron is intensifying efforts to sign long-term and strategic customer agreements, which is expected to enhance revenue visibility and stability.

This announcement provides investors with further confidence in the long-term stability of its business while addressing external concerns regarding geopolitical risk.

On Thursday, driven by Micron's news, the chip sector saw widespread gains: ARM rose over 11%, AMD rose over 7%, Lumentum rose over 10%, Corning rose over 7%, Marvell rose over 5%, and storage-related stocks such as Western Digital, Seagate, and SanDisk all rose over 6%.

Supply Chain Layout: Locking in Core Silicon Wafer Resources

On the supply chain strategic level, Micron has signed a 10-year supply agreement with GlobalWafers to ensure long-term access to advanced wafer production capacity required for high bandwidth memory (HBM) and DRAM manufacturing.

Micron is also providing $500 million in strategic financing to GlobalWafers to support the construction of an advanced 300 mm raw silicon wafer facility in Sherman, Texas.

Micron's Senior Vice President and Chief Procurement Officer Ben Tessone stated in a statement:

These initiatives help build a more resilient supply chain, supporting future innovation and the ongoing growth demand for advanced storage solutions.

GlobalWafers is currently the only supplier certified under the U.S. CHIPS for America Program that can produce advanced 300 mm wafers domestically. Both parties also stated that they will further explore cooperation opportunities in next-generation wafer technology.

AI Demand Surge, Storage Chip Shortages Spreading to Multiple Industries

The core driver behind Micron's expanded investment comes from the rapid expansion of AI infrastructure. High-end processors used in data centers have a massive demand for memory chips, and memory chip manufacturers have shifted their production focus to this high-premium, high-growth market.

AI-driven storage demand has triggered a global supply shortage reaching into various industries, including consumer electronics and automotive manufacturing.

Wall Street Insight mentioned that Apple recently raised prices across its entire lineup of Mac, iPad, home devices, and Vision Pro products to cope with rising storage costs and is reportedly exploring sourcing memory products from two Chinese chip manufacturers listed on the U.S. Department of Defense's blacklist.

In terms of competitive landscape, South Korea's two major memory giants, Samsung Electronics and SK Hynix, recently announced a total investment of $88 billion over the next few years to expand capacity. Among them, SK Hynix is preparing for an IPO in the U.S., which is estimated to raise nearly $27 billion based on its latest closing price in Seoul.

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