Memory maker Micron moots $150bn mega manufacturing moneybag

AI and 5G to fuel demand for new plants and R&D


Chip giant Micron has announced a $150bn global investment plan designed to support manufacturing and research over the next decade.

The memory maker said it would include expansion of its fabrication facilities to help meet demand.

As well as chip shortages due to COVID-19 disruption, the $21bn-revenue company said it wanted to take advantage of the fact memory and storage accounts for around 30 per cent of the global semiconductor industry today.

AI and 5G investment were accelerating demand for memory chips, said Micron president and CEO Sanjay Mehrotra in a pre-canned statement.

While Micron did not specify where it would invest, reports from the Nikkan Kogyo newspaper suggest that it will build a new factory at its Japanese production site in Hiroshima at a cost of around $7bn.

Pandemic-hit supply chains and spiking demand have prompted a flurry of investment from semiconductor companies recently.

Earlier this month, contract chip manufacturer TSMC said it would increase capacity to meet the growing demand for chips in equipment related to 5G, high-performance computing, and automotive products.

"COVID-19 has... fundamentally accelerated the digital transformation making semiconductors more pervasive and essential in people's lives," CEO CC Wei said during an earnings call. "TSMC is better positioned to capture the course from its favourable industry megatrend."

TSMC is expected to construct a new factory in Japan to fabricate chips using older 22 and 28-nanometer nodes. The factory will go live in 2024, but TSMC didn't mention the type of chips the facility will produce.

Meanwhile, Intel has announced an $80bn investment in Europe but has said the expansion plans would not include the UK after the nation's departure from the EU trading bloc.

In the short term, the world's fourth-largest memory maker, Taiwan's Nanya Technology Corporation, has predicted a price "correction" in late 2021, saying the demand is low as component shortages and COVID-related electronic factory disruptions continue. Meanwhile, prices for DRAM and NAND flash are set to fall, sharply, in the second half of 2022 if you believe analyst firm Gartner. The hope here will be that by 2024, those prices will rise again - especially for all those putting in money in high cost fabbing, with all its related compliance, energy and production tariffs. ®

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