Micron Technology Inc (NASDAQ:MU) shares rose 7% on Thursday after the company announced plans to invest up to $3 billion to strengthen the U.S. semiconductor supply chain and support future manufacturing capacity.
The investment includes $500 million in strategic financing support for GlobalWafers to advance development of its GlobalWafers America 300mm raw silicon wafer manufacturing facility in Sherman, Texas.
The companies also plan to enter into a 10-year supply agreement that would provide Micron with access to additional raw silicon wafer capacity.
Micron said the investment is intended to improve supply assurance, increase long-term planning flexibility and support demand for advanced memory and storage solutions driven by artificial intelligence and other data-intensive applications.
“Securing a reliable supply of critical input materials is essential to supporting Micron’s long-term growth and technology roadmap,” Ben Tessone, senior vice president and chief procurement officer at Micron, said in a statement.
GlobalWafers CEO Doris Hsu added that the partnership with Micron would support the expansion of local semiconductor manufacturing capabilities and strengthen supply chain resilience in the US.
Micron and GlobalWafers also plan to explore collaboration on next-generation wafer technologies and process innovations.
The proposed transaction remains subject to definitive agreements, customary approvals and closing conditions.
The news also lifted shares across the broader semiconductor sector, with Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD) gaining 7%, Qualcomm Inc (NASDAQ:QCOM, XETRA:QCI) rising 4%, Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) advancing 3%, Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) up 2% and Applied Materials Inc (NASDAQ:AMAT, XETRA:AP2) climbing 6%.