Micron Technology (NASDAQ:MU) edged 1.7% lower to $974.57 in premarket trading Friday, trimming some of the 4.5% gain posted on Thursday. The memory-chip maker had surged after unveiling plans to boost US investment by more than $50 billion, a move that added roughly $48.4 billion to its market capitalization—almost exactly matching the planned expenditure.
The Philadelphia Semiconductor Index (SOX) climbed 3.06% on Thursday, but Micron’s stock outperformed, contributing an additional 1.46 percentage points, or about $15.7 billion, after stripping out the sector’s broader move. That differential is under the spotlight as SK Hynix (NASDAQ:SKHYV; KRX:000660) begins when-issued trading in New York on Friday, ahead of regular settlement.
While the estimate is rough—Micron trades with higher volatility than the index, and company-specific news often moves chip stocks—the math suggests that roughly two-thirds of Thursday’s gain was driven by broad chip buying, not solely a reaction to the new factory pledge.
Micron now projects US chip and technology investment exceeding $250 billion through 2035, up from its earlier $200 billion target. The company aims to produce 40% of its DRAM output in the US, and its Clay, New York, facility began pouring concrete more than a quarter ahead of schedule.
Separately, Micron established a supply-chain plan worth up to $3 billion, including $500 million in financing for a Texas factory producing 300-millimeter silicon wafers—the foundational discs for chips—paired with a 10-year supply agreement. “Securing a reliable supply of critical input materials is essential to supporting Micron’s long-term growth and technology roadmap,” said procurement chief Ben Tessone.
The near-term spending is modest relative to Micron’s cash generation. The company posted $18.3 billion in adjusted free cash flow last quarter and holds $30.2 billion in cash, investments, and restricted cash. The $3 billion plan represents about 16% of quarterly free cash flow, while the longer-term $50 billion increase would consume roughly 2.7 quarters of current free cash flow. Micron has not specified annual spending targets, and memory cash flows remain volatile.
BofA Global Research analyst Vivek Arya reiterated his Buy rating and $1,550 price target. “We believe the market is underestimating the transition toward longer-duration agreements and more predictable pricing,” Arya wrote, projecting global cloud and AI infrastructure spending of about $1.5 trillion in 2027, with memory accounting for 35% to 40% of that.
SK Hynix’s US debut introduces a direct competitor at a lower valuation. The South Korean chipmaker raised $26.5 billion from its American depositary receipt sale, priced at $149 each. SK Hynix leads in high-bandwidth memory, a stacked chip critical for fast data transfer to AI processors. Its stock trades at about 5.8 times forecast 12-month earnings, below Micron’s roughly 7 times.
The trade could reverse if AI infrastructure spending slows or production outpaces demand, pushing memory prices and margins lower before Micron’s new plants deliver returns. Daniel Newman, CEO of Futurum Group, noted that in a severe “AI winter,” Micron’s broader spread and US base could make it “the relative safe haven,” but in a milder downturn, SK Hynix might benefit from more locked-in supply.
At Friday’s open, the key question is whether Micron can maintain its valuation premium after US investors gain access to SK Hynix. If Micron continues to lag the SOX, capital may shift to the new listing. If it holds up, it may signal that investors still value its US manufacturing and contract-backed cash flows.
