Micron successfully acquires PSMC fab to accelerate its DRAM build-up
Micron has just bought 300,000 square feet of 300mm fab space, and it will be dedicated to DRAM technologies
Following their January announcement (see here), Micon has successfully acquired a large fab from Powerchip Semiconductor Manufacturing Corp. (PSMC). For $1.8 billion, Micron has purchased PSMC’s P5 site in Tongluo, Miaoli County, Taiwan. This gives Micron access to 300,000 square feet of 300mm fab space that can be dedicated to DRAM production.
Now, Micron plans to retrofit this cleanroom space to expand its production of high-end DRAM products. This will include DDR5 DRAM and HBM memory. Micron has also started planning the next phase of expansion on the site, with plans to build an extra 270,000 square feed ot cleanroom space. Construction is set to begin at the end of its 2026 fiscal year (which ends in August 2026).
PSMC (Powerchip Semiconductor Manufacturing Corp., 6770.TW) announced on the 16th the completion of a $1.8 billion transaction with Micron Technology, Inc. (Nasdaq: MU) for its Tongluo plant. While transferring the facility to Micron, both parties will also begin collaborations at PSMC’s Hsinchu plant site to provide HBM/PWF foundry services and advance memory process technologies, according to their agreement. This strategic transformation is expected to bring strong growth momentum to PSMC’s new 3D AI foundry business.
– PSMC
A new fab for Micron, and a tech boost for PSMC
As part of this deal, Micron has established a “long-term relationship” with PSMC. PSMC is a fab that focuses on older DRAM products. Micron’s deal with PSMC will reportedly lead to PSMC obtaining a 1Y nm process license from Micron. This would enable PSMC to develop newer DRAM types (denser DDR4 modules). This deal would help PSMC compete in the DRAM market without directly competing with Micron. If this is true, PSMC’s upgraded tech should be worth the cost of its lost fab space. Furthermore, Micron may be able to boost its DRAM production ahead of its competition. This will gain Micron market share in DRAM while pricing remains high.
The new site will complement Micron’s existing operations in Taiwan as an extension of the company’s vertically integrated mega campus in Taichung, located approximately 15 miles away. The site includes approximately 300,000 square feet of existing 300mm cleanroom space and will support Micron’s efforts to expand supply of leading-edge DRAM products, including HBM, to meet growing AI-driven demand.
Micron began preparations for the new Tongluo site following the deal announcement in January 2026 and will begin retrofitting the existing cleanroom now that the transaction has been completed. The new Tongluo site is expected to support meaningful product shipments from the existing fab beginning in fiscal 2028. The company is also planning the next phase of expansion at the site, with construction set to begin by the end of fiscal 2026 on a second facility of comparable scale, adding approximately 270,000 square feet of cleanroom space.
– Micron
Expect this site to be delivering meaningful shipments of DRAM in “fiscal 2028”
Micron has stated that this new site should produce “meaningful product shipments from the existing fab beginning in fiscal 2028”. Note that Micron’s 2028 Fiscal year will start in August 2027. However, it is unclear when, within Micron’s fiscal year, production volumes will affect global DRAM supply. Previously, Micron has stated that “this acquisition will contribute to meaningful DRAM wafer output beginning in the second half of calendar 2027.”
Overall, this is a good deal for Micron, as buying existing fab space is much faster than building new fab space. This will allow Micron to increase its DRAM production ahead of its rivals, as new fab space takes years to build.
Despite breaking ground on its new ID1 (Idaho 1) site three years ago, Micron does not expect the site to go online until mid-2027. From there, it will take Micron time to complete its qualification procedures. Only then can this site produce DRAM at scale. For ID1, Micron expects this site to deliver “meaningful output” in 2028. With the purchase of PSMC’s P5 site in Taiwan, Micron can boost its production before ID1 is complete.
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