In an unexpected turn of events, Micron announced plans to buy Powerchip Semiconductor Manufacturing Corporation's (PSMC) P5 fabrication site in Tongluo, Miaoli County, Taiwan, for a total cash consideration of $1.8 billion. To a large degree, the transaction would evolve Micron's long-term 'technology-for-capacity' strategy, which it has used for decades. This also signals that DRAM fabs are now so capital-intensive that it is no longer viable for companies like PSMC to build them and get process technologies from companies like Micron. The purchase is also set against the backdrop of the ongoing DRAM supply squeeze, as data centers are set to consumer 70% of all memory chips made in 2026.
"This strategic acquisition of an existing cleanroom complements our current Taiwan operations and will enable Micron to increase production and better serve our customers in a market where demand continues to outpace supply," said Manish Bhatia, executive vice president of global operations at Micron Technology. "The Tongluo fab's close proximity to Micron's Taichung site will enable synergies across our Taiwan operations."
Deal expected to close in Q2 2026
(Image credit: Micron)
The deal between Micron and PSMC includes 300,000 square feet of existing 300mm cleanroom space, which will greatly expand Micron's production footprint in Taiwan. By today's standards, a 300,000 square foot cleanroom is a relatively large one, but it will be dwarfed by Micron's next-generation DRAM campus in New York, which will feature four cleanrooms of 600,000 square feet each. However, the first of those fabs will only come online in the late 2020s or in the early 2030s.
The transaction is expected to close by Q2 2026, pending receipt of all necessary approvals. After closing, Micron will gradually equip and ramp the site for DRAM production, with meaningful wafer output starting in the second half of 2027.
The agreement also establishes a long-term strategic partnership under which PSMC will support Micron with assembly services, while Micron will assist PSMC's legacy DRAM portfolio.
The end of a tried and true model?
(Image credit: Micron Electronics)
While the P5 site in Tongluo isn't producing memory in high volumes today, the change of ownership and inevitable upgrade of the fab itself will have an impact on global DRAM supply, which is good news for a segment that is experiencing unprecedented demand. While it is important that Micron is set to buy a production facility in Taiwan, it is even more important that the transaction marks an end to its technology-for-capacity approach to making memory on the island. In the past, instead of building large amounts of new greenfield fabs in Taiwan, Micron partnered with local foundries (most notably PSMC, but also with Inotera and Nanya) and provided advanced DRAM process technology in exchange for wafer capacity, manufacturing services, or fab access.
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