US chipmaker Micron said on Friday (Jun 16) it would invest more than US$600 million in its packing and testing factory in northwest China, less than a month after Beijing banned its chips from critical infrastructure projects.

In a WeChat statement, the firm said it would invest the sum over the next few years in its plant in the city of Xi’an to acquire equipment and add a new factory at the facility.

China’s cybersecurity watchdog last month said Micron had failed a national security review, telling operators of “critical information infrastructure” to stop buying its products.

It was the latest escalation in a bitter chip war between the United States and China, which has seen Washington move to block Beijing’s access to cutting-edge semiconductors.

“This investment project underscores Micron’s unwavering commitment to our China business and our China team members,” CEO Sanjay Mehrotra said in a statement.

Micron said it would buy the chip-packaging equipment from the Xi’an-based Licheng Semiconductor, which had already been operating some equipment in the US company’s facility under a previous agreement.

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“The investment is in line with Micron’s global packaging and testing concept and would give the company the flexibility to manufacture a wide portfolio of products in Xi’an,” the firm said in its WeChat statement. AFP