Idaho-based Micron Technology, Inc. (MU) plans to invest more than $150 billion in memory manufacturing and R&D across the globe over the next ten years, according to a report published by StreetInsider.com.
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Shares of the company closed over 1% higher on Wednesday but lost 0.4% after-hours to end the day at $68.01.
MU offers computer memory and computer data storage solutions like USB flash drives, flash memory and random-access memory.
The President and CEO of Micron, Sanjay Mehrotra, said, “We look forward to working with governments around the world, including in the U.S. where CHIPS funding and the FABS Act would open the door to new industry investments, as we consider sites to support future expansion.”
Furthermore, the company plans to invest $7 billion to build a new production facility at its Hiroshima factory, Japanese newspaper Nikkan Kogyo reported. The new unit will manufacture DRAM chips from 2024.
Micron is also thinking of investing in a new memory plant in the U.S. It is seeking to secure subsidies from the federal and state governments to offset higher costs. (See Insiders’ Hot Stocks on TipRanks)
The Chief Business Officer at Micron, Sumit Sadana, said, “We certainly want to very seriously assess manufacturing in the U.S. because the U.S. ought to have more than 2% of memory manufacturing for the sake of national security and for the sake of supply chain resiliency.”
Following the announcement, Mizuho Securities analyst Vijay Rakesh downgraded the rating on the stock to Hold from Buy and lowered the price target to $75 from $90 (10% upside potential).
The analyst said, “The company likely will be affected by low supplier inventory, weaker seasonal demand, weaker mobile demand from China, and increased competition from other chip semiconductor makers.”
Overall, the stock has a Moderate Buy consensus rating based on 15 Buys and 6 Holds. The average Micron Technology price target of $97.90 implies 43.4% upside potential. Shares have gained 28.1% over the past year.
According to TipRanks’ Smart Score rating system, Micron scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
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