In a statement posted on WeChat, the company said it would invest more than 4.3 billion yuan ($605 million) over the next few years in its factory in Xi'an to buy equipment and add a new facility at the plant.
China's cybersecurity watchdog said last month that Micron had failed a national security assessment and told operators of "vital information infrastructure" to stop buying its products.
It was the latest escalation in a chip war raging between the United States and China that has seen Washington take measures to block Beijing's access to advanced semiconductors.
CEO Sanjay Mehrotra said in the statement: "This investment project underscores Micron's unwavering commitment to our business in China and our team members in China."
Micron said it would buy chip packaging equipment from Xi'an-based Lisheng Semiconductor, which currently operates some of the equipment at the U.S. company's facility under an earlier agreement.
"The investment is in line with Micron's global packaging and testing concept and will give the company the flexibility to manufacture a wide range of products in Xi'an," the company said in its statement.
Meanwhile, the US company is close to signing a deal to invest at least one billion dollars to set up a semiconductor products packaging plant in India, according to Bloomberg.
Investments could rise to two billion dollars.
According to a Bloomberg report, the agreement may be announced during Indian Prime Minister Narendra Modi's visit to the United States next week.