Micron to invest up to $3B in U.S. chip supply

Micron announced plans to invest up to $3 billion to expand the U.S. semiconductor supply-chain ecosystem. The company’s shares jumped roughly 6% in premarket trading following the announcement and analyst commentary on AI-driven memory demand.

As part of the program, Micron will provide $500 million in strategic financing to GlobalWafers to expand its GlobalWafers America 300mm raw silicon wafer facility in Sherman, Texas. The two companies also agreed to a 10-year supply arrangement to secure wafer capacity for Micron’s manufacturing needs and said they will explore collaboration on next-generation wafer technologies and process improvements.

In a statement, Micron described the investment as securing a reliable U.S. supply of critical manufacturing materials, enhancing supply assurance, improving long-term planning flexibility and supporting growing demand for advanced memory and storage solutions driven by artificial intelligence and other data-intensive applications.

The stock’s rise extended a rebound after a pullback from levels above $1,200 in late June when investors questioned whether AI spending that boosted memory demand would be sustained. The recovery followed gains at South Korean memory makers, including a more than 5% increase at SK Hynix.

Bank of America analyst Vivek Arya kept a Buy rating on Micron and a $1,550 price target, estimating global cloud and AI infrastructure spending could reach $1.5 trillion by 2027, with roughly 35% to 40% of that spending directed to memory components. Arya’s valuation applies about three times expected 2028 book value to Micron’s traditional memory business and a price-to-earnings multiple of 31 times projected 2028 earnings for its high-bandwidth memory unit.

UBS raised its forecast for DRAM contract prices and now projects DDR prices to increase about 32% quarter-on-quarter in the third quarter, up from an earlier estimate of 17%.

Raw 300mm silicon wafers are a primary input for semiconductor fabrication; larger wafer capacity can lower per-chip costs and support higher-volume production of advanced memory. Memory products such as DRAM and high-bandwidth memory are used in servers and AI accelerators, which require large amounts of fast memory for training and running models.

Micron framed the investment as an effort to reinforce domestic supply chains and secure access to materials and capacity needed for advanced chip production.