Earlier today, Micron Technology (MU) announced that it is increasing its U.S. chipmaking and research plans to $200 billion in order to meet rising demand and produce 40% of its DRAM memory chips in the U.S. As a result, the company will build two large fabs in Idaho, four in New York, expand and modernize a fab in Virginia, and develop advanced packaging and R&D projects in the U.S. The first Idaho fab is expected to begin producing DRAM chips in 2027, with a focus on the fast-growing artificial intelligence market. The second Idaho fab will likely begin production before the New York facilities.
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Unsurprisingly, U.S. Secretary of Commerce Howard Lutnick said that this $200 billion investment will help strengthen the country’s leadership in industries like AI, automotive, aerospace, and defense. In addition, Micron CEO Sanjay Mehrotra stated that the project highlights the company’s commitment to innovation and support for the U.S. semiconductor industry. Interestingly, it is also worth noting that Micron’s U.S. investments qualify for the Advanced Manufacturing Investment Credit and already have strong backing from local, state, and federal governments.
This includes up to $6.4 billion in CHIPS Act funding to support two fabs in Idaho, two in New York, and upgrades to its Virginia fab. Moreover, Micron secured $275 million in funding through the CHIPS and Science Act to help produce its 1-alpha DRAM node in the U.S. This led Amazon Web Services (AMZN) CEO Matt Garman to call the investment a key milestone for the semiconductor industry, which builds on Micron’s earlier 2022 plans to expand its U.S. chip production.
Is MU a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MU stock based on 19 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Micron price target of $126.15 per share implies 9% upside potential.
