Micron says it is committed to China, investing $602 million in facilities

SHANGHAI, June 16 (Reuters) – U.S. memory chip maker Micron ( MU.O ) said on Friday it was committed to China and would invest 4.3 billion yuan ($603 million) over the next few years in the plant for chip package in the Chinese city of Xian.

The company has been targeted by China̵[ads1]7;s cyberspace regulator, which said last month that the firm, America’s largest memory chip maker, had failed a network security review and that the regulator would block operators of key infrastructure from buying from the company.

Micron did not mention the reviewer’s decision in its Friday statement, posted on WeChat.

“This investment project demonstrates Micron’s unwavering commitment to its China business and team,” CEO Sanjay Mehrotra was quoted as saying in a statement.

The investment will include the purchase of packaging equipment from a Xian-based subsidiary of Taiwan’s Powertech Technology Inc ( 6239.TW ), which Micron has used in the factory since 2016, the company said.

Micron will also open a new production line at the site to produce mobile DRAM, NAND and SSD products to enhance the facility’s packaging and testing capabilities.

Powertech said in a separate statement that the plan for Micron to buy the equipment was part of the 2016 agreement between the firms, so the financial impact to Powertech would be limited.

Micron, China’s Ministry of Commerce and the Cyberspace Administration of China did not immediately respond to requests for comment.

Micron did not disclose the value of the deal, but said it would offer contracts to 1,200 employees at Powertech’s Xian subsidiary and that the investment would create an additional 500 jobs.

This will bring Micron’s workforce in China to more than 4,500 people, the company added.

In May, Micron predicted a hit to revenue in the low-single to high-single-digit percentages after the China ban. A Reuters review of more than 100 public procurement tenders found that Chinese authorities scaled back purchases of Micron’s chips before the ban.

($1 = 7.1337 yuan)

Reporting by Brenda Goh and Beijing Newsroom; Additional reporting by Sarah Wu in Taipei; Editing by Muralikumar Anantharaman and Gerry Doyle

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