Micron affirms dedication to China, injects $602 million into new plant

U.S. memory chipmaker Micron said on Friday it was committed to China and would invest 4.3 billion yuan ($603 million) over the next few years in its chip packaging facility in the Chinese city of Xian.

The company has been targeted by China’s cyberspace regulator, which last month said the firm, the United States’ biggest memory chipmaker, had failed a network security review and that the regulator would block operators of key infrastructure from buying from the company.

Micron made no mention of the review’s decision in its Friday statement, posted on WeChat.

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

The investment will include buying packaging equipment from a Xian-based subsidiary of Taiwan’s Powertech Technology Inc, which Micron has been using in the factory since 2016, the company said.

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

Powertech said in a separate statement that the plan for Micron to buy the equipment was part of the 2016 agreement between the firms, so the financial impact on Powertech would be limited.

Micron, China’s commerce ministry and the Cyberspace Administration of China 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’s Xian subsidiary and that the investment would create an additional 500 jobs.

This would bring Micron’s workforce in China to more than 4,500 people, the company added.

Micron in May forecast a hit to revenue in the low-single to high-single digit percentages after the China ban. A Reuters review of more than 100 public government tenders found that Chinese authorities were scaling back purchases of Micron’s chips before the ban. Reuters