Micron Technology (NASDAQ:MU) has been making headlines recently, for both good (record profits) and not-so-good (the poster child for China-U.S. trade war spats) reasons. It's only one of three major producers of DRAM memory and one of six producers of NAND flash memory. It's also the only U.S-based company that makes DRAM.

In a show of patriotic fervor, the company recently announced it would be investing heavily in its U.S. operations based in Manassas, Virginia, about 45 miles west of Washington, D.C. This large investment signals the company's continued optimism for stable profits in the coming years, buoyed by future-use cases for memory in autonomous vehicles and the Internet of Things.

A driver behind the wheel reading a book as the self-driving car drives itself.

Is Micron a play on self-driving cars? Image source: Getty Images.

A $3 billion bet

Micron announced it will be investing roughly $3 billion in its Virginia operations by 2030. While that seems like a massive number, when taken over 12 years it amounts to an annual investment of only $250 million. Given that Micron generated $4.3 billion in operating cash flow last quarter alone and plans to spend $8 billion on capital expenditures in the current fiscal year, $250 million annually doesn't seem quite as daunting.

The investment will include a small expansion of clean room space as well as the hiring of around 1,100 employees in the area. Micron's investment will establish the Manassas, Virginia, site the company's Center for Excellence for its long life cycle memory projects, including a research and development (R&D) center to complement its other sites in Idaho, Japan, China, Singapore, and Italy. In the press release, CEO Sanjay Mehrotra said, "Micron's Manassas site manufactures our long-lifecycle products that are built using our mature process technologies, and primarily sold into the automotive, networking and industrial market."

Embedded solutions to skyrocket

The factory will be a part of Micron's embedded solutions segment, which made up only 11.5% of Micron's revenue last quarter. However, if industry projections pan out, those applications should grow much faster than the broader memory market in the near future.

While DRAM and NAND have typically been associated with the PC, mobile phone, and server markets, the growing amount of electronic content in automobiles and factories likely will accelerate over the coming years. Micron projects that, between 2017 and 2021, the automotive memory market will grow almost 140%, while the Internet of Things memory market (which is significantly larger) will grow more than 70%.

Beyond 2021, more widespread adoption of Level 5 autonomous vehicles could accelerate the need for memory even further. Although today's "regular" vehicles have quite a bit of electronic content in them, a fully autonomous Level 5 vehicle -- which can drive with no human behind the wheel -- will need more than nine times the amount of DRAM and a stunning 100 times the amount of NAND flash!

Graphs showing large DRAM and NAND content in autonomous vehicles.

Image source: Micron Analyst Day presentation.

Micron is jumping on the autonomous opportunity. Although the company is the third-largest producer of DRAM overall, it has the largest market share of the automotive segment.

Management has been very bullish on the automotive segment's prospects in its public presentations, comparing autonomous vehicles to "data centers on wheels." For context, there are about eight times more cars sold every year than enterprise servers, so while the automotive memory market is small compared with data centers or mobile phones today, self-driving cars will go a long way toward closing that gap.

Betting on American factories and cars -- the robotic kind

I wrote earlier this year that the memory producers that make the "picks and shovels" of computing power may in fact be the biggest beneficiaries in the autonomous driving race. Micron's $3 billion investment in Virginia indicates that it shares the same opinion.

Billy Duberstein owns shares of Micron Technology. His clients may own shares of some of the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.