Micron CEO defends plans of over $150 billion investment in chip manufacturing and R&D
- Micron to invest over $150 billion in chip manufacturing and R&D over the next decade.
- CEO Sanjay Mehrotra discusses the investment plan on CNBC's "Squawk on the Street".
- Shares of the U.S. semiconductor manufacturer are up more than 2.0% on Wednesday.
The massive investment includes setting up a new $7.0 billion DRAM production plant in Hiroshima, Japan.
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CEO Mehrotra’s remarks on CNBC’s ‘Squawk on the Street’
Micron is also considering building a factory in the U.S. as long as Congress approves subsidies and investment tax credits that are currently under debate. On CNBC’s “Squawk on the Street”, CEO Sanjay Mehrotra said:
Tremendous opportunity for the U.S. with the passage of the Chips Act and FABS Act to support the U.S. semiconductor industry which is extremely important for economic growth, national security considerations, and driving innovation for America on a global stage.
Shares of the Idaho-based company are up more than 2.0% on Wednesday.
Falling DRAM and NAND prices shouldn’t be a concern
Mehrotra sees strong demand for memory and storage in the coming years with applications in “everything that’s changing our lives” from smartphones to autonomous vehicles.
He agreed that DRAM and NAND prices were going down but fixated on the share of “memory and storage” within the semiconductor space that expanded from 10% to 30% over the last two decades and set to increase further in the future.
While prices may go up and down and the semiconductor industry may have its cycles, the trajectory of cycles is one of revenue increase, profitability increase, free cash flow generation. This is what Micron has demonstrated.
Last month, Micron said fiscal 2022 was expected to be a “record year” in terms of revenue.