August 29, 2018 / 5:12 PM / 3 months ago

Micron Technology plans $3 billion expansion of Virginia plant

(Reuters) - Chipmaker Micron Technology Inc (MU.O) said Wednesday it plans to spend $3 billion (2.33 billion pounds) over the next 12 years to expand a plant in Virginia about 40 miles (64 km) west of Washington, D.C.

Chief Executive Sanjay Mehrotra told Reuters in an interview the expansion aims to meet increasing demand for chips in automobiles, which are gaining more computer power for features such as collision avoidance systems or lane departure warning systems. The company expects that market to double to $6 billion by 2021.

“Think of the automobiles of the future as data centres on wheels,” he told Reuters.

The money will be spent to build about 100,000 square feet of additional “clean room” space for making memory chips at Micron’s existing Manassas, Virginia factory, which employs about 1,500 people. Micron expects the expansion to create 1,100 permanent jobs for engineers and technicians once complete.

Boise, Idaho-based Micron, the world’s fourth largest semiconductor firm by revenue according to research firm Gartner, differs from much of the chip industry in that it still makes its own chips rather than farming the work to contract factories and that it still makes many of its chips in the United States. It also makes chips in Singapore, Japan and Taiwan, but only performs assembly and test work in China.

The company has become a prominent point in trade relations between China and the United States. Micron in 2015 rejected a takeover bid made by a state-backed Chinese company as China was trying to build out its chip industry, a development that the U.S. Trade Representative Robert Lighthizer highlighted in a report in March about China’s trade practices.

Micron later alleged in a U.S. lawsuit that a different Chinese firm stole its trade secrets. That firm in turn sued Micron in a Chinese court alleging Micron violated its patents, and the Chinese court banned some of Micron’s chips while the trial proceeds.

U.S. officials brought up Micron’s story during trade talks with Chinese trade officials earlier this month, according to two people familiar with the talks.

Mehrotra said the decision to expand in Virginia “really does not have anything to do with the recent discussions with China on various trade matters.” Instead, he said, Virginia was chosen for expansion because it has been making chips for 15 years there for car makers, who demand higher levels of durability and reliability than gadget makers.

“We have a deep culture in the Manassas facility of supporting the demanding requirements of these customers,” he said.

Reporting by Stephen Nellis and David Lawder in Washington; Editing by Lisa Shumaker

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