Micron Technology (MU) shares moved lower Thursday after the memory chip maker unveiled plans to invest $15 billion in the construction of a new manufacturing base in Idaho.
Micron said the new facility will be the first new-memory manufacturing hub built on U.S. soil in more than two decades, and will ensure that domestic supplies of memory chips for the automotive and data center sectors remain consistent.
Micron said its own investments, as well as funds from the recently-passed CHIPS and Science Act bill and incentives from the state government of Idaho, will help create 17,000 news jobs linked to the Boise-based plant, with around 2,000 people added to Micron's payroll by the end of the decade.
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“Our new leading-edge memory manufacturing fab will fuel U.S. technology leadership, ensuring a reliable domestic supply of semiconductors that is critical to economic and national security. We also appreciate the support of Governor Little and his administration, Idaho state legislators, Mayor McLean and our partners at Idaho Power," said CEO Sanjay Mehrotra. "We are proud of the positive impact this investment will have on the community and our more than 6,000 employees located in Boise, Micron’s headquarters and the epicenter of our innovation for over 40 years.”
Micron shares were marked 0.9% lower in early afternoon trading Thursday following news of the new investment to change hands at $56.05 each.
Micron shares were also pressured by rising Treasury bond yields, which typically hold back gains for tech stocks, as well as news from last night the Nvidia Corp. (NVDA) has been ordered by the U.S. government to cease the sale of its AI chips to China.
Last month, lowered its near-term revenue guidance amid what it described as "macroeconomic factors and supply chain constraints" that have blunted global demand.
The group's new CFO, Mark Murphy, told investors that fiscal fourth quarter revenues will likely come in at the lower end of its early July guidance, or possibly below, adding that he expects a "challenging market environment in FQ4 22 and FQ1 23."
Micron had cautioned in late June that waning demand, will likely mean it will begin decreasing the amount of chips it produces in the fall, in order to maintain firm pricing, and said it sees revenues for its fiscal fourth quarter at only 7.2 billion, well shy of the Refinitiv forecast of around $9.1 billion, thanks in part to a 30% hit to Micron's overall China sales.
