After securing a $6.1 billion investment in chip manufacturing in the USA, Micron Technology Inc shares surged in the pre-market trading.

2024/12/10 21:56

The White House announced on Tuesday that Nvidia, a rival to AMD but a competitor of Micron Technology Inc (NASDAQ: MU), received investments of over 6.1 billion dollars. Following this, the stock price rose by 2.47% in pre-market trading.
What happened: This investment will support the construction of advanced Memory Chip facilities in Clay, New York, and Boise, Idaho. Vice President Kamala Harris expects this initiative to create at least 0.02 million jobs by the end of the 10 years.

The Department of Commerce has also agreed to the interim conditions for an additional investment of 0.275 billion dollars to expand Micron's facility in Manassas, Virginia. This expansion will support critical technologies essential for defense, automobile, and national security sectors.

According to Mr. Harris, the U.S. government's efforts aim to increase the U.S. share in advanced memory manufacturing from nearly zero to 10% over the next 10 years. This initiative is part of a broader strategy to strengthen the U.S. supply chain and enhance national security and economic resilience.
Why is it important: Investment in Micron Technology is taking place in a challenging environment for US chip makers. Recently, Micron temporarily suspended its application for US semiconductor subsidies. This decision was revealed by CEO Steve Sanghi at the UBS conference, highlighting the hurdles companies face in securing financial assistance under the CHIPS Act. Micron Technology could have received 10.62 million dollars in grants, but its stock price has dropped 29% year-to-date, becoming a contributing factor to the decline of the Philadelphia Stock Exchange Semiconductor Index.