In a strategic move to expand its global memory manufacturing footprint, Micron Technology, Inc. (NASDAQ: MU) has entered into an exclusive Letter of Intent to acquire the Powerchip Semiconductor Manufacturing Corporation's P5 fabrication facility located in Tongluo, Miaoli County, Taiwan, for $1.8 billion. This agreement, announced on a recent Saturday, marks a significant addition to Micron’s capacity for dynamic random-access memory (DRAM) production as demand for memory chips continues to intensify.
The Tongluo plant, a 300,000-square-foot facility equipped with a 300 millimeter cleanroom specialized for advanced memory wafer fabrication, is positioned to bolster Micron's efforts to scale production and enhance its supply capabilities. Micron anticipates that the site will begin supporting phased DRAM production starting in 2027, following completion of the transaction expected by the second quarter of 2026. This timeline is subject to customary regulatory approvals and the finalization of definitive agreements.
This acquisition complements Micron’s recently announced plans to develop a $100 billion memory manufacturing complex in Onondaga County, New York. The new factory in Taiwan lies geographically close to Micron’s existing operations in Taichung, offering potential operational synergies that could optimize production efficiencies and strengthen customer service in the Asia-Pacific region.
As part of the agreement under the Letter of Intent, Micron and Powerchip Semiconductor Manufacturing Corporation (PSMC) will pursue a long-term collaboration focused on post-wafer assembly processing. This partnership is designed to reinforce PSMC's legacy DRAM business while concurrently supporting Micron's broader strategic objectives to increase its manufacturing capacity to meet rising global memory chip demands.
Manish Bhatia, executive vice president of global operations at Micron, emphasized the significance of this acquisition by stating it aligns with the company's commitment to addressing the persistent gap between memory demand and supply. Bhatia underscored the strategic benefit of augmenting Micron's Taiwan operations with an existing cleanroom facility, facilitating speedy production scale-up to satisfy customer needs in markets driven by artificial intelligence, data centers, and high-performance computing applications.
Financially, Micron concluded its most recent fiscal quarter with a robust liquidity position, holding approximately $12 billion in cash, marketable securities, and restricted cash combined. Furthermore, the chipmaker's board approved a quarterly dividend of $0.115 per share, scheduled for distribution in mid-January, reflecting confidence in its financial stability and long-term growth strategy.
Industry context reveals that global DRAM demand is intensifying across multiple sectors, catalyzed by advancements in AI workloads, expansion of data center infrastructure, and emerging high-performance computing needs. This environment underlines Micron’s rationale for accelerating capacity investment timelines and diversifying production sites globally to mitigate supply constraints.
Market participants like Intel Corporation (NASDAQ: INTC) and Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM) are also notable players within the semiconductor ecosystem, competing within various segments of the memory and chip fabrication markets.
The market has recognized Micron’s growth prospects; over the past year, MU stock has appreciated by more than 243%. Investors interested in leveraged exposure to Micron can consider instruments such as the GraniteShares 2x Long MU Daily ETF (NASDAQ: MULL).
In summary, Micron's $1.8 billion acquisition of PSMC's P5 fab facility in Taiwan represents a decisive step toward expanding DRAM production capability in response to escalating memory demand. The integration of this facility into Micron's operations aims to accelerate supply augmentation timelines and reinforce its global manufacturing network over the coming years.
January 17, 2026
Finance
Micron Boosts Global DRAM Capacity with $1.8 Billion Taiwan Facility Acquisition
Strategic purchase near existing operations aims to address surging memory chip demand
Leila Farooq
Telecom & Media Analyst
Summary
Micron Technology has agreed to acquire a semiconductor fabrication plant in Taiwan for $1.8 billion, reinforcing its global expansion in memory production. The deal involves buying Powerchip Semiconductor Manufacturing Corporation’s P5 fab in Tongluo, Taiwan, with the facility expected to contribute to DRAM production phases starting in 2027. This acquisition complements Micron's ongoing investments, including its $100 billion manufacturing complex in New York, to meet growing DRAM demand from sectors such as AI and data centers.
Key Points
Micron signs Letter of Intent to acquire PSMC’s P5 semiconductor fabrication site in Tongluo, Taiwan, for $1.8 billion.
The acquired facility features a 300,000-square-foot 300 mm cleanroom for advanced memory wafer fabrication, with production phases planned to commence in 2027.
This purchase complements Micron's ongoing $100 billion memory manufacturing complex development in New York and leverages operational synergies near its Taichung, Taiwan operations.
Micron and PSMC plan a long-term partnership focusing on post-wafer assembly processing to support both companies’ positions in the memory market.
Risks
- Completion of the acquisition is subject to regulatory approvals and final agreement executions.
- Production ramp-up from the new plant is planned for 2027, meaning delays could impact supply targets.
- Market demand fluctuations for DRAM could affect the expected benefits of increased manufacturing capacity.
- Operational integration between Micron and PSMC facilities requires effective collaboration to realize synergies.
Disclosure
Education only / not financial advice