Micron says it is committed to China, and is investing $602 million in the plant

SHANGHAI (Reuters) – U.S. memory chip maker Micron said on Friday it is committed to China and will invest 4.3 billion yuan ($603 million) over the next few years in a chip packaging facility in the Chinese city. Xian.

The company has been targeted by China’s cyberspace regulator, which said last month that the company, the largest maker of memory chips in the US, had failed a network security review and that the regulator would block major infrastructure operators from buying from the company.

Micron did not mention the review’s decision in its Friday statement posted to WeChat.

“This investment project demonstrates Micron’s unwavering commitment to its business and team in China,” CEO Sanjay Mehrotra was quoted as saying.

The company said the investment will include the purchase of packaging equipment from the Xian-based subsidiary of Taiwanese Powertech Technology Inc (6239.TW), which Micron has used at the plant since 2016.

Micron will also open a new production line on site to manufacture mobile DRAM, NAND and SSD products to enhance the plant’s packaging and testing capabilities.

Powertech said in a separate statement that Micron’s plan to purchase the equipment was part of a 2016 agreement between the two companies, so the financial impact on Powertech would be limited.

Micron, the Chinese Ministry of Commerce and the China Cyberspace Administration did not immediately respond to requests for comment.

Micron did not disclose the value of the deal but said it would offer contracts to 1,200 employees of Powertech subsidiary Xian and that the investment would create an additional 500 jobs.

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The company added that this would raise Micron’s workforce in China to more than 4,500 people.

Micron in May expected revenue to be affected in the low to high single-digit percentages after the Chinese ban. A Reuters review of more than 100 public government tenders found that Chinese authorities had scaled back their purchases of Micron chips before the ban.

($1 = 7.1337 yuan)

Paraphrasing by Brenda Goh and the Beijing newsroom; Additional reporting by Sarah Wu in Taipei. Editing by Muralikumar Anantharaman and Jerry Doyle

Our standards: Thomson Reuters Trust Principles.

Brenda Goh

Thomson Reuters

Brenda Goh is Reuters’ Shanghai bureau chief, overseeing corporate coverage in China. Brenda joined Reuters as an intern in London in 2010 and has published stories from more than a dozen countries. Contact (only used for reference): +442071932810

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