Micron finds a way to make more DRAM with $1.8bn chip plant purchase
Summary
Micron has signed a letter of intent to acquire Powerchip Semiconductor Manufacturing Corporation’s P5 Tongluo site in Taiwan for US$1.8 billion. The deal covers a 300 mm fab cleanroom of about 300,000 sq ft and is expected to begin contributing meaningful DRAM wafer output in the second half of calendar 2027. Powerchip will shift its existing production lines from Tongluo to another facility in Hsinchu and enter a long-term foundry relationship with Micron centred on advanced DRAM packaging wafer manufacturing.
Remarkably, Powerchip opened the Tongluo site less than 19 months ago after a reported NT$300 billion (about US$9.5 billion) investment. The company now says it will phase out low-margin legacy products and focus on higher-margin items for AI applications.
Key Points
- Micron has a letter of intent to buy Powerchip’s P5 Tongluo site for US$1.8bn, adding immediate capacity.
- The acquisition includes a 300 mm fab cleanroom (≈300,000 sq ft) and should add DRAM wafer output from H2 2027.
- Powerchip will move operations to another Hsinchu facility and shift away from legacy, low-margin processes.
- Powerchip invested roughly US$9.5bn in Tongluo less than 19 months ago, making the exit notable and costly.
- Micron is also expanding other fabs (including a recent US announcement); AI datacentre demand is driving a sharp memory demand surge and price increases.
- Loss of Tongluo’s legacy DRAM output may further tighten supply for older DRAM types, pushing prices higher for PCs, servers and other buyers.
Context and relevance
This is a strategic, fast-track capacity move by Micron amid a global memory squeeze driven by AI datacentre builds. Buying an existing fab gets Micron running sooner than building from scratch — important when demand outpaces supply. For the industry, Powerchip’s decision to abandon legacy DRAM at Tongluo underlines a broader shift: fabs are prioritising higher-margin, AI-related products over mature nodes. That rearranges supply for both advanced and legacy memory markets and can ripple into device prices and procurement planning.
Why should I read this?
Short version: if you care about memory supply, server and PC costs, or the semiconductor supply chain, this matters. Micron just grabbed a ready-made way to ramp DRAM faster — while Powerchip’s retreat from legacy chips makes some types of memory scarcer. We’ve read the fine print so you don’t have to; this deal helps explain where prices and availability might head next.