This article first appeared on GuruFocus.
Micron Technology (NASDAQ:MU) has taken an equity stake in Taiwan-based GlobalWafers to support construction of the company’s wafer manufacturing facility in Sherman, Texas, as part of a broader effort to strengthen the U.S. semiconductor supply chain.
Wedbush Securities said the investment may indicate Micron expects silicon wafers to become another supply constraint as demand for memory and logic chips continues to rise through the end of the decade. The firm said growing investment across the semiconductor industry could increase wafer requirements in the coming years.
Micron Technology (NASDAQ:MU) said it plans to invest up to $3 billion to support the domestic semiconductor ecosystem, including its financing commitment to GlobalWafers. The company has also increased its long-term U.S. investment target to more than $250 billion by 2035, up from a previously announced $200 billion.
The expansion is intended to support Micron’s goal of producing 40% of its DRAM memory chips in the United States while creating additional manufacturing jobs.
Wedbush added that the investment could reflect expectations for sustained demand growth, although expanded capacity may eventually increase the risk of oversupply.
