Micron to invest $604m in chip unit

US firm to open production line to beef up testing, packaging capability

Micron Technology, a US memory chipmaker, said on Friday it will invest 4.3 billion yuan ($604 million) in its chip packaging plant in Xi'an, Shaanxi province, as part of its long-term commitment to the Chinese market.

The company will open a new production line at the site to manufacture chips to strengthen the plant's packaging and testing capabilities. Micron said in a post on WeChat on Friday that part of the planned investment will go toward the purchase of packaging equipment from a Xi'an-based subsidiary of Powertech Technology, which Micron has been using in the factory since 2016.

The investment demonstrates the company's unwavering commitment to its China business and the local team, Micron CEO Sanjay Mehrotra said in the WeChat post.

Micron said it would offer job contracts to 1,200 employees of Powertech's Xi'an subsidiary and that the investment would create an additional 500 jobs. This would bring Micron's workforce in China to more than 4,500 people.

Micron, experts said, thus joins a group of US and European tech companies that have recently expressed confidence in China, a crucial market to their business and an indispensable part of their global supply chains.

Highlighting that decoupling is a "wrongheaded idea", industry experts further said open international cooperation is the key to promoting technological innovation that can benefit the world.

The Xi'an investment plan comes after the Cyberspace Administration of China said in May that products of Micron sold in China have not passed a recent cybersecurity review, and operators of the country's key information infrastructure should stop purchasing its products.

Roger Sheng, vice-president of Gartner, a US market research company, said the investment plan clearly showed Micron's attitude toward the Chinese market, which accounted for around 11 percent of the company's $30.8 billion global sales in 2022. "China has always attached great importance to the global tech industry and sticks to globalization."

On Thursday, German industrial company Siemens said it was investing 140 million euros ($153 million) to expand its digital factory in Chengdu, Sichuan province, and building a new research and development center in Shenzhen, Guangdong province.

Heads of a string of US companies are, or have been, visiting China of late. For instance, this week, Bill Gates, co-founder of Microsoft, is on his first visit to Beijing since 2019. Last month, Tesla's Elon Musk, JPMorgan's Jamie Dimon and Starbucks' Laxman Narasimhan visited China.

The fresh investment plans and frequent visits of top executives of iconic US corporations speak volumes about the importance of China to their businesses — and it is impossible for such companies to delink from the country, experts said.

Foreign Ministry spokesman Wang Wenbin said at a press conference on Friday: "We are happy to see foreign-funded enterprises investing and developing in China, deeply cultivating the Chinese market, and sharing development opportunities."

Since the beginning of this year, the Chinese economy has continued to recover, and the resilience and attractiveness of the Chinese market remain strong, Wang said.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said that for many foreign companies China is a big market, a key part of their supply chains and a major source of innovation. "Any attempt to decouple from China is infeasible," Pan said.

Denis Simon, president of the Alliance of Global Talent Organizations, said decoupling is a "wrongheaded idea" and would prove a big mistake. It could mean certain countries are unable to appreciate China's achievements in solving problems that are of concern to people around the world, he said.

masi@chinadaily.com.cn