Shares of Micron Technology (MU) were on an upswing in pre-market trading as the U.S. Department of Commerce announced a $6.1 billion subsidy for the data storage company to boost its semiconductor manufacturing in the U.S.
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This grant is one of the largest government awards under the U.S. CHIPS and Science Act. The funds will support Micron’s factory projects in New York and Idaho, with the goal of creating over 20,000 jobs by the end of the decade.
U.S. Investment Expands Virginia Facility
In addition, Micron and the Commerce Department have reached preliminary terms for a $275 million investment to expand the company’s facility in Manassas, Virginia. This facility primarily manufactures chips used in the automotive, networking, and industrial markets. According to the White House, this expansion is crucial for onshoring “a critical technology relied upon by our defense industry, automotive sector, and national security community.”
CHIPS Act Boosts U.S. Chip Production
The Biden administration aims to strengthen domestic semiconductor production to reduce dependence on China and Taiwan for chips. Notably, the U.S. has also finalized other major subsidies, including $7.86 billion for Intel (INTC) and $6.6 billion for TSMC’s (TSM) U.S. operations.
These awards come just ahead of President-elect Donald Trump’s upcoming inauguration, as he has been a critic of the CHIPS Act.
Is MU a Good Stock to Buy Right Now?
Analysts remain bullish about MU stock, with a Strong Buy consensus rating based on 23 Buys, one Hold and Sell each. Over the past year, MU has soared by more than 30%, and the average MU price target of $149.81 implies an upside potential of 45.7% from current levels.
