Micron Technology Inc (NASDAQ:MU) will likely receive $6.1 billion in grants from the U.S. Commerce Department.
This funding is for Micron’s domestic factory, which aims to shift semiconductor production back to the U.S..
Bloomberg reports that this initiative aligns with the broader national strategy to rejuvenate American chip manufacturing, a sector that has largely migrated to Asia over recent decades.
Also Read:Micron Unveils Quad-Port SSD For Next-Gen Intelligent Vehicles
The grant, which is part of a package that also includes loans, is expected to be announced next week.
President Joe Biden plans to highlight this development during a visit to the Syracuse, New York, area, where Micron is constructing new factories. The project is also underway in Boise, Idaho, Micron’s headquarters.
Micron’s ambitious plans include the construction of up to four factories in New York State and one in Idaho.
The Commerce Department focuses on funding projects that promise production startup by the end of the decade, with Micron’s initial two New York sites expected to meet this timeline.
Analysts have flagged Micron’s strategic focus on the high-bandwidth memory (HBM) market, particularly its leadership in the HBM3E sector, known for its 30% greater power efficiency than competitors.
The company’s emphasis on HBM, designed for specific computing architectures, marks a shift from the generic approach in memory products and is integral to engaging with critical data center market customers.
As analysts have noted, adopting HBM could significantly enhance Micron’s gross margins.
Micron stock gained 88% in the last 12 months. Investors can gain exposure to the stock via REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI) and Invesco Semiconductors ETF (NYSE:PSI).
Price Action: MU shares traded higher by 1.93% at $118.58 premarket on the last check Thursday.
Also Read:Micron’s DRAM Supply Temporarily Hit by Taiwan Earthquake, But Long-Term Outlook Remains Strong
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
