Micron plans to invest more than $600 million in its Xi’an, China, factory to show its commitment to China, just weeks after the U.S. memory chipmaker was banned from supplying critical infrastructure operators in the country.
Last month, Beijing banned major carriers from sourcing products from the Idaho-based company after an investigation found that its products “present serious cybersecurity risks.”
Beijing’s actions were not mentioned in the company’s announcement Friday on the WeChat social media app. Micron said it would spend 4.3 billion yuan ($603 million) over the next few years to upgrade chip packaging and testing equipment at its Xi’an factory.
“This investment demonstrates Micron’s strong commitment to its China business and team,” said Sanjay Mehrotra, the group’s chief executive officer.
Micron’s announcement comes as the Chinese consumer electronics group is developing plans to replace the group’s memory chips, according to two people familiar with the matter. Beijing’s statement last month did not specify the scope of the restrictions, but industry sources say the technology group has been pre-emptively redesigning products in case Micron is completely eliminated from China’s offerings.
Micron did not respond to a request for comment.
Under the planned investment, Micron will add 500 new jobs, bringing its total workforce in China to more than 4,500.
The chipmaker will also buy packaging equipment from the Xi’an-based subsidiary of Taiwan’s Powertech Technology, which has been in use at the plant since 2016. Micron also plans to build a new memory chip production line at the facility, saying it has been “preparing the project for some time.”
Beijing’s action against Micron is seen as the first major punitive action against a U.S. semiconductor company in response to Washington’s tightening of restrictions on chip-related exports to China.
It follows a seven-week investigation into Micron Technology led by China’s State Internet Information Office.