Micron Technology said it will use "anticipated" government grants and credits to help it invest US$40 billion by the end of the decade to build out US semiconductor manufacturing capacity.
The company expects to begin to produce chips after 2025 and said it will create as many as 40,000 jobs, the Boise, Idaho-based memory manufacturer said in a statement on Tuesday(Aug 9). The investment is being funded with subsidies it believes it will be awarded from the Chips and Science Act, Micron said.
The spending plan is part of the company's previously announced US$150 billion global investment goal, which it detailed last year. President Joe Biden is expected to sign the chips act into law on Tuesday as part of a package of spending and tax reforms. Most of Micron's production is done in Japan, Singapore and Taiwan.
"Micron's domestic leading-edge manufacturing capabilities will ensure US national security and supply chain resilience as demand for memory grows in critical market segments like automotive and data centre, fuelled by accelerating adoption of artificial intelligence and 5G," the company said in the statement.
The company, which competes with South Korea's Samsung Electronics and SK Hynix, as well as Japan's Kioxia Holdings, said last month that it's cutting spending on plants and equipment to slow increases in factory output amid concerns about a glut in the market. Electronic device makers that buy Micron's chips have been scaling back orders to reduce their own inventory.
Micron Technology said its free cash flow was expected to be negative for the fiscal first quarter and that it could see significant sequential declines in revenue and margins in the period due to a fall in shipments.
The company also said fourth-quarter revenue may come in at or below the low end of its previous forecast in June, further pointing to weakening demand from PC and gaming industries.
Other chip makers including Intel, Advanced Micro Devices and Nvidia Corp and storage company Western Digital have warned of a slowing uptake from PC makers as inflation dents demand.
Micron forecast adjusted revenue for the current quarter at US$7.2 billion, plus or minus US$400 million. BLOOMBERG, REUTERS
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