Micron to Buy Powerchip Taiwan Fab for $1.8 Billion to Fuel AI Memory Push

TAIPEI – U.S. memory giant Micron Technology has signed an exclusive letter of intent to purchase a fabrication plant from Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) for $1.8 billion in cash, stepping up its push to secure production capacity for next-generation memory chips used in artificial intelligence systems.

The deal for Powerchip’s P5 fabrication site in Tongluo, Miaoli County, will give Micron access to approximately 300,000 square feet of cleanroom space, allowing it to accelerate capacity expansion without the long construction timelines typical of new build projects.

Powerchip shares rose nearly 10% in Taipei trading on Monday following the announcement.

DRAM capacity boost

Micron said the transaction is expected to contribute to meaningful DRAM wafer output in the second half of 2027, as the company ramps production to meet surging demand for AI and data center memory.

The acquisition also includes a long-term partnership between Micron and Powerchip. Micron said it would work with Powerchip on areas including post-wafer assembly processing, while also supporting Powerchip’s legacy DRAM business.

Micron is one of three global suppliers of high-bandwidth memory (HBM) — alongside Samsung Electronics and SK Hynix — and demand for HBM has been rising sharply as AI accelerators increasingly require faster memory performance.

Taiwan remains central

The deal reinforces Taiwan’s continued importance to the global semiconductor supply chain, despite rising geopolitical tension in the region. Micron has a long-standing presence on the island and remains its largest foreign direct investor.

The acquisition is expected to close in the second quarter of 2026, subject to regulatory approvals.

Summary

Micron Technology has signed an exclusive letter of intent to buy Powerchip Semiconductor’s P5 fabrication site in Tongluo, Taiwan for $1.8 billion in cash, securing around 300,000 square feet of cleanroom space to accelerate its manufacturing expansion. Micron expects the facility to contribute to meaningful DRAM wafer output in the second half of 2027, strengthening its ability to meet rising AI- and data center-driven demand for advanced memory products, including HBM.

FAQs

Q1) What is Micron buying in Taiwan?

Micron is purchasing Powerchip’s P5 fabrication site in Tongluo, Taiwan. The transaction covers the fab building and infrastructure (including cleanroom space), not the entire Powerchip company.

Q2) How much is Micron paying for the fab?

Micron will pay $1.8 billion in cash for the facility.

Q3) Why is Micron buying an existing plant instead of building a new fab?

Speed. Building a new semiconductor fab typically takes years. Buying an existing facility provides faster access to production-ready infrastructure and avoids delays common in greenfield projects.

Q4) What will Micron produce at the acquired fab?

Micron expects the facility to support additional DRAM wafer output, with meaningful contribution expected by the second half of 2027.

Q5) How does this support AI demand?

AI servers and accelerators require increasingly high-performance memory, including advanced DRAM and HBM (High Bandwidth Memory). Expanding manufacturing capacity helps Micron meet growing demand from AI and cloud data center customers.

Q6) Will Micron and Powerchip continue working together?

Yes. Micron said the transaction includes a long-term partnership with Powerchip, including cooperation around certain manufacturing and processing areas and support for Powerchip’s existing DRAM business.

Q7) When will the deal close?

The acquisition is expected to close in Q2 2026, subject to regulatory approvals and customary conditions.

Q8) Why does Taiwan matter for the chip industry?

Taiwan remains one of the world’s most important semiconductor hubs due to its skilled workforce, supplier ecosystem and established manufacturing infrastructure—making it strategically significant for global chip production.