Micron Technology recently announced that it has significantly increased its investment plan in the United States from the original US$125 billion to US$200 billion (about 1.44 trillion yuan), aiming to accelerate the local layout of memory manufacturing, advanced packaging and R&D. This investment is not only a positive response to the CHIPS and Science Act, but will also have a profound impact on the current global semiconductor landscape.
Ⅰ Micron's investment layout is a panoramic view: manufacturing and R&D two-wheel drive
According to Micron's announced plan, the company will build a new DRAM memory wafer fab in Boise, Idaho, and build another one on top of the original one; Four large-scale fabs will be built in Clay, New York, at the same time, with the first expected to start construction by the end of 2025. In addition, Micron will expand its mature process fab in Manassas, Virginia, and begin construction of an HBM (High Bandwidth Memory) packaging facility. The new Boise facility is scheduled to start production in 2027 and will focus on cutting-edge DRAM manufacturing.
In terms of R&D, Micron has committed to investing $50 billion, focusing on next-generation memory architectures, HBM technology, high-density stacking and new materials research, and continues to promote full-link innovation from advanced processes to packaging forms, maintaining its leading position in the field of memory technology.
Ⅱ A key link in the U.S. semiconductor strategy
Semiconductors are the foundation of the modern digital economy. In 2022, the U.S. share of the global semiconductor market was about 46.3%, slightly lower than about 50% a decade ago. Although it still has advantages, in manufacturing, the proportion of the United States in global wafer capacity has fallen to about 12%, far lower than the 37% in the 90s.
In the face of this trend, the U.S. government proposed $52 billion in funding to support semiconductor manufacturing and R&D through the CHIPS and Science Act, and Micron is one of the main beneficiaries. To date, Micron has received $640 million in direct subsidies approved by the U.S. Department of Commerce and is eligible to claim the Advanced Manufacturing Investment Tax Credit. In addition, the company will invest more than $325 million in three states (Idaho, New York, and Virginia) for local workforce training to support the construction of industrial ecology.
Figure: Micron Technology plans to invest $200 billion in the United States
Ⅲ HBM Technology: Targeting AI and high-performance computing needs
As a next-generation high-bandwidth, low-power storage solution, HBM has become a key component of AI training, inference, and high-performance computing. According to TrendForce, the global HBM market size was $3.5 billion in 2023 and is expected to exceed $15 billion by 2027, growing at a compound annual growth rate of more than 30%.
Micron's technical reserves in HBM have already been reflected, and the HBM3E product launched in 2023 is in direct competition with Samsung and SK hynix in terms of bandwidth and energy efficiency. The new packaging facility in Boise will enable the company to integrate HBM into more AI server and data center solutions, filling a key gap in the U.S. in the field of advanced packaging.
Ⅳ Competitive landscape in the memory market: Breakthroughs and challenges coexist
In the global DRAM market, Samsung Electronics ranks first with a market share of 44.7%, SK hynix has 27.8%, and Micron has about 11.2%. In the NAND Flash market, Micron ranks fifth. Although its share is relatively limited, Micron has strategic depth in the current policy environment that emphasizes supply chain resilience, with North America as the core of R&D and production localization as its strategy.
It is estimated that the global memory chip market will reach $210 billion in 2025, of which application scenarios such as AI, 5G, and autonomous driving will become the core of growth. Micron's expansion is not only expected to increase its global share, but also seize policy dividends and strategic discourse through localization strategies.
Ⅴ The driving effect of employment and ecology is significant
Micron estimates that the $200 billion investment will create about 90,000 direct and indirect jobs in the United States, covering manufacturing, engineering, supply chain management and research and development. This plan will significantly promote the agglomeration effect of the semiconductor industry in the United States, and form a benign drive for universities, scientific research institutions, and supply chain enterprises.
It is worth noting that the United States has long relied on international imports for high-end semiconductor talents. Micron's expansion will force the U.S. education system to strengthen STEM (science, technology, engineering and mathematics) talent training, and at the same time intensify the global battle for semiconductor talent.
Ⅵ Financial strength and execution capabilities are the key supports
Micron has a current ratio of 3.13 as of the first quarter of 2024, total cash and short-term investments of about $10 billion, and a "good" financial health rating, according to InvestingPro data. Against the backdrop of a recovery in the global market price cycle and a surge in demand for AI storage, Micron's revenue in the second quarter of fiscal 2024 reached $5.77 billion, a year-on-year increase of 58%, better than market expectations, providing strong cash flow support for the expansion.
In addition, Micron has made it clear that all of its investments in the U.S. will seek CHIPS Act tax credit support to further reduce the burden of capital expenditure.
Ⅶ Risks and challenges: Technology evolution and global supply chains are still uncertain
Despite the favorable macro trend, Micron still needs to face three major challenges: technology renewal, market competition and global supply chain fluctuations:
1. Uncertainty of the technology path: DRAM and HBM products have short cycles and fast updates, and if the R&D progress lags behind or the direction is wrong, it may affect the market response speed and gross profit margin.
2. Fierce market competition: Korean manufacturers are increasing investment in HBM and advanced manufacturing processes, Samsung has announced that HBM4 products will be launched in 2025, Micron needs to continue to make technological breakthroughs to consolidate its differentiation advantages.
3. Supply chain dependence still exists: Although local manufacturing capacity has been enhanced, core links such as lithography machines, EDA software, and advanced materials still need to rely on Japan, the Netherlands, Taiwan, etc., and geopolitical and export restrictions may affect delivery stability.
Ⅷ Conclusion: Micron's deep intentions to bet on "Made in the USA."
Micron's investment in the United States will be increased to 200 billion US dollars, which is a deep participation in the reconstruction of the global semiconductor landscape. Behind it is not only driven by capital, but also an active response to the trend of "technological sovereignty" and "manufacturing reshoring". In the industrial reshaping of supply chain security, talent development, policy support and technological innovation, Micron's layout will have a profound impact on the revival of domestic semiconductors in the United States, and will also become an important reference for global semiconductor companies to make future investment decisions.
Against the backdrop of increasingly fierce technology competition between China and the United States, Micron's expansion plan may not only be a business choice, but also a strategic demonstration.
