Micron to boost DRAM output with $1.8bn chip fab buy

"Micron's version of events says it's signed a letter of intent to acquire Powerchip's entire P5 site in Tongluo, Taiwan, for total cash consideration of US$1.8 billion. "The acquisition includes an existing 300 mm fab cleanroom of 300,000 square feet and will further position Micron to address growing global demand for memory solutions," the company stated, adding that the company "expects this acquisition to contribute to meaningful DRAM wafer output beginning in the second half of calendar 2027.""

"Powerchip's take on the deal includes news that it will establish a long-term foundry relationship with Micron "on DRAM advanced packaging wafer manufacturing." The deal means PSMC will leave the Tongluo site and move the production lines it operates there to another of its facilities in the city of Hsinchu. PSMC has assured its foundry customers it can do this without disrupting its operations, but also says it plans to "phase out low-margin products to reduce reliance on mature process foundry services" and build more products for AI applications."

"That's a remarkable decision given that PSMC opened the Tongluo site less than two years ago. In its May 2024 'Hooray, we're open!' announcement, PSMC said it invested more than NT$300 billion (US$9.5 billion) on the facility, and that it had capacity to produce 50,000 12-inch wafers per month under 55, 40 and 28 nanometer technology nodes. The company also scoped a second fab on the site to produce 2 nanometer chips."

Micron signed a letter of intent to acquire Powerchip's entire P5 site in Tongluo, Taiwan, for US$1.8 billion. The acquisition includes a 300 mm fab cleanroom of 300,000 square feet and aims to address growing global demand for memory solutions. Micron expects meaningful DRAM wafer output beginning in the second half of calendar 2027. Powerchip will establish a long-term foundry relationship with Micron for DRAM advanced packaging wafer manufacturing. PSMC will move Tongluo production lines to its Hsinchu facilities while assuring customers of no operational disruption. PSMC plans to phase out low-margin mature-process foundry products and pivot toward AI-focused products after investing heavily in Tongluo less than two years earlier.

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