Micron Technology Inc (NASDAQ: MU) is in focus on Tuesday after the semiconductor giant revealed plans of building the largest U.S. chip factory ever.
Micron wants to increase its domestic production
The Nasdaq-listed firm says it will spend as much as $100 billion over more than twenty years to set up a new semiconductor facility in “Clay”.
CEO Sanjay Mehrotra credited the CHIPS and Science Act of 2022 for the “Megafab” that will create about 50,000 jobs in New York and help the company produce at least 40% of its leading-edge DRAM chips in the U.S. over the next decade.
A day earlier, Micron Technology cited supply chain challenges as it issued disappointing guidance for its current financial quarter. (detailed here)
Shares are down more than 40% for the year.
President Biden cheers Micron’s announcement
The CHIPS and Science Act of 2022 devotes $52 billion in funding to encourage domestic chip production. Cheering Micron’s announcement, President Joe Biden, who championed the bipartisan law said:
Together, we’re building an economy from the bottom up and the middle out. The world can’t run without chips. And if we let a foreign power be in charge of manufacturing, they could sin our economy any time they want.
According to Micron, $20 billion out of that overall spending plan will be invested this decade. Wall Street continues to recommend investing in this stock. The highest price objective on “MU” is $100 – about an 85% upside from here.
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