U.S. memory chip giant Micron Technology Inc (NASDAQ:MU) said it plans to invest an additional 4.3 billion yuan ($602 million) in its chip-packaging plant located in China, despite recent restrictions imposed by Beijing on the use of its semiconductors.
The investment will involve acquiring equipment and expanding assembly lines at the existing facility in Xi’an, a city in central China.
Through this expansion, Micron aims to create 500 new jobs, increasing its total workforce in the country to over 4,500 employees, Bloomberg reported. The company said it would offer contracts to 1,200 Powertech employees.
Micron’s plan to expand its Xian plant comes after the China Administration of Cybersecurity (CAC) barred critical information infrastructure providers from buying Micron’s products, citing national security risks.
The company’s management has said that Beijing’s ban could hit Micron’s revenue in the single digits, as China contributes about 11% of Micron’s global sales.
The ban on Micron’s chips has intensified the uncertainties faced by U.S. chipmakers, including Qualcomm Inc., Broadcom Inc., and Intel Corp, who rely on the Chinese market.
Price Action: MU shares are up 2.54% at $70.57 during the premarket session on the last check Friday.
