Chip maker Micron Technology (NASDAQ:MU) is betting on Japan to advance the production of high-end chip manufacturing with the support of the Japanese government. The company is set to invest roughly $3.6 billion in its Hiroshima plant, which started mass production of its high-capacity, low-power 1-beta dynamic random access memory (DRAM) chips last year. Following the news, MU stock was up 2.3% in pre-market trading at the last check.
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The company is implementing the new-age extreme ultraviolet lithography (EUV) chipmaking technology in the facility for bulk manufacturing. The advanced memory chips are slated to start production in 2025.
The deal also marks the rekindling of the U.S.-Japan partnership to counter the growing clout of Chinese chip makers. The CHIPS Act of the United States intends to provide around $53 billion to support local chip manufacture and research. At the same time, Japan also hopes to regain its lost market share as one of the prime chip manufacturers by supporting the likes of Micron.
Meanwhile, Micron is also wanting to cut its dependence on the Chinese market as it stands to undergo cybersecurity scrutiny in the Mainland, as a result of which its products may be banned from the market. Micron is also planning to invest up to $100 billion in a huge chip manufacturing plant in New York, which was touted as one of the largest investments of the type by the President himself.
Is Micron a Good Stock to Buy?
On TipRanks, Micron has a Moderate Buy consensus rating based on 18 Buys, four Holds, and two Sell ratings. Also, the average Micron Technology price forecast of $70.29 implies 8.3% upside potential compared to current levels. Year to date, MU stock has gained 29.1%.
