MU - Micron wins $13 billion from U.S. to boost domestic chip production

2024-04-25 08:20:50 ET

Micron Technology Inc (NASDAQ: MU) is in focus today after securing $13 billion from the U.S. government to set up new chip factories in Idaho and New York.

Micron received funding as part of the Chips Act

The semiconductor behemoth will receive $6.1 billion in direct funding and another $7.5 billion in loans as the Biden administration remains committed to cutting reliance on the Asian supply chain.

U.S. did also announce similar funding packages under the Chips Act for peers including Samsung, Intel, and TSMC in recent weeks as Invezz reported here.

By the end of this decade, the Biden administration wants at least 20% of the leading-edge chips to be made in the United States.

Wall Street currently has a consensus “overweight” rating on Micron stock that’s up more than 35% for the year at writing.

Micron to invest billions in Idaho and New York

Micron Technology also committed to investing a whopping $125 billion in Idaho and New York over the next two decades as part of the agreement revealed on Thursday.

The chipmaker expects its under construction facility in Boise to go live in 2026 while the two factories in New York will begin production in 2028 and 2029, respectively. According to senator Chuck Schumer:

This is the federal government taking back the reins, and putting its money where its mouth is when we say we want the future of technology to be stamped Made in America.

In March, cited AI demand as it reported a surprise profit for its second financial quarter ( find out more ).

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