Micron Technology has secured a significant opportunity to expand its DRAM manufacturing capacity by acquiring a chipmaking facility from Powerchip Semiconductor Manufacturing Corporation (PSMC) for $1.8 billion. This acquisition, confirmed over the weekend, involves the P5 site located in Tongluo, Taiwan.
The deal encompasses a 300 mm fab cleanroom spanning 300,000 square feet, which Micron states will help address the increasing global demand for memory solutions. The company anticipates that this acquisition will lead to a notable increase in DRAM wafer output starting in the second half of 2027.
Powerchip’s Transition
Powerchip has indicated that it will establish a long-term foundry relationship with Micron focused on DRAM advanced packaging wafer manufacturing. Following the acquisition, PSMC plans to relocate its production lines from the Tongluo site to another facility in Hsinchu. The company has assured its foundry customers that this transition will occur without disrupting ongoing operations.
In a strategic shift, PSMC also intends to phase out low-margin products, reducing its reliance on mature process foundry services, and will focus more on products tailored for AI applications. This decision comes less than two years after the Tongluo site was inaugurated, which had seen an investment exceeding NT$300 billion (approximately $9.5 billion) and was capable of producing 50,000 12-inch wafers monthly across various technology nodes.
Market Implications
Micron’s acquisition aligns with its broader global expansion strategy to meet the long-term demand from customers. The company is already in the process of constructing new memory fabs, including a recently announced facility in New York State. The surge in demand for memory and storage, particularly driven by new data center builds for AI infrastructure, has created a challenging supply environment for semiconductor companies.
This imbalance between supply and demand has led to a significant increase in memory prices, with Micron reporting that it has pre-sold all of its high-bandwidth memory production for 2026. As PSMC exits the legacy chip business, the scarcity of legacy DRAM products may further exacerbate the situation, impacting prices and availability for manufacturers of PCs, servers, GPUs, and smartphones.
This article was produced by NeonPulse.today using human and AI-assisted editorial processes, based on publicly available information. Content may be edited for clarity and style.
