Micron tips China packaging plan as politicians meet

Business news | June 19, 2023

By Peter Clarke

Memory chip maker Micron said on Friday June 16 that it plans to invest more than 4.3 billion yuan (US$600 million) at its packaging and test facility at Xi’an, China.

The announcement was made just before US Secretary of State Anthony Blinken flew into Beijing to meet with Chinese President Xi Jinping for talks that it was hoped would reduce tension between the countries.

Micron Technology Inc. (Boise, Idaho) said it plans to acquire equipment from Powercheng Semiconductor (Xi’an) Co. Ltd. (Licheng Xi’an) and to build a factory at its Xi’an site to better satisfy Chinese demand.

The factory building will contain a production line for the manufacture of mobile DRAM, NAND and solid-state drive (SSD) products, Micron said. It has been preparing for the project for some time, and has started the qualification certification for the production of mobile DRAM in Xi’an.

“After the completion of the new factory building, we will gradually introduce new equipment and manufacturing processes in Xi’an. The acquisition of Licheng Xi’an assets enables Micron Xi’an to directly operate all packaging testing business,” said Wu Mingxia, general manager of Micron China, in statement.

Powercheng Xi’an was operating its own equipment inside Micron’s factory in Xi’an under a long-term agreement since 2016. That agreement has expired giving Micron the option to acquire the equipment. Micron said it expects the acquisition to be completed in about a year, subject to Chinese regulatory approval.

‘Unwavering commitment’

Micron will take up the employment of all 1,200 employees of Licheng Xi’an as well as creating more than 500 additional jobs. This will bring the total number of Micron employees in China to more than 4,500.

Micron CEO Sanjay Mehrotra said: “This investment project demonstrates Micron’s unwavering commitment to China business and Chinese team members.” Micron’s operations in China include locations in Beijing, Shanghai, Shenzhen and Xi’an.

Micron has a long and productive but also troubled history in China. In 2015 there were rumblings of a takeover bid for Micron from Chinese semiconductor conglomerate Tsinghua Unigroup (see China bids $23 billion for Micron). This coincided with a first raising of tension between the US and China over technology and its potential use in a modernization of the People’s Liberation Army.

Between 2015 and 2021 legal spats broke out between Micron, Fujian Jinhua Integrated Circuit Co. Ltd. and UMC over China’s domestic development of DRAM technology (see UMC settles Micron memory battle). In 2022, as US-China tension increased, Micron made the decision to close down its chip design activities in China (see Micron pulls DRAM design out of China). In May 2023 the Cyberspace Adminsitration of China (www.cac.gov.cn) said Micron products had failed a network security review and were banned from being bought for use in Chinese critical infrastructure equipment (see Micron hit with ban on sales into Chinese ‘critical infrastructure’).