Micron Acquires PSMC Fab in Tongluo, Taiwan

Expansion of DRAM Capacities Micron Acquires PSMC Fab in Tongluo, Taiwan

2026-01-21 From Sebatsian Gerstl | Translated by AI 3 min Reading Time

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Micron has announced that it will take over the PSMC plant in Tongluo as part of a strategic partnership. Market analysts see this as a relevant step for the global DRAM supply from 2027.

Micron site in Taichung, Taiwan. As part of a strategic partnership with PSMC, the memory manufacturer intends to take over the foundry provider's plant in Tongluo. The aim is to address the increased demand for DRAM memory on the market.(Image: Micron) — Micron site in Taichung, Taiwan. As part of a strategic partnership with PSMC, the memory manufacturer intends to take over the foundry provider's plant in Tongluo. The aim is to address the increased demand for DRAM memory on the market.
(Image: Micron)

Micron Technology has signed an exclusive letter of intent to acquire the P5 manufacturing site of Powerchip Semiconductor Manufacturing Corporation (PSMC) in Tongluo, Taiwan. The purchase price is US$1.8 billion in cash and includes land, buildings and an existing 12 inches clean room area of approximately 300,000 square feet (approximately 280,000 meters).

The site is intended to complement Micron's existing activities in Taiwan. Due to the geographical proximity to the Micron plant in Taichung, the company expects operational synergies. Once the transaction has been completed, Micron intends to gradually equip the plant with its own and new equipment and ramp it up for DRAM production.

Planned Transition And Timeframe

The acquisition is expected to be completed in the second quarter of 2026 following approval by the relevant authorities. PSMC will relocate its existing activities in Tongluo over a defined period of time. Micron expects to achieve a relevant contribution to its own DRAM wafer production from the site from the second half of 2027.

Parallel to the takeover, a long-term cooperation has been agreed. PSMC is to take over assembly and packaging services for Micron in future. Conversely, Micron intends to support PSMC with its existing DRAM portfolio, which is currently primarily based on mature structure widths.

Improvement in Global DRAM Supply By 2027

According to market analysts at TrendForce, the expansion of the Tongluo site could have a noticeable impact on the global DRAM supply situation from 2027. This is due to the increasing demand for advanced memory products such as HBM3e and DDR5, driven by AI applications and specialized processors.

TrendForce expects that the first expansion stage in Tongluo could reach more than ten percent of Micron's global DRAM capacity in the second half of 2027 based on the fourth quarter of 2026. For PSMC, the partnership opens up prospects to further develop its own offering in higher density DDR4 products without competing directly with Micron's leading DRAM lines.

PSMC's current DRAM capacity is mainly based on 25nm and 38nm nodes, which limits DDR4 production to lower density products. In addition, following Micron's recent letter of intent, PSMC is expected to acquire a license for the 1Y-nm process within the next year, with the possibility of obtaining a 1Z-nm license in the long term. This would enable higher density DDR4 products, allowing PSMC to maintain its competitiveness in the consumer DRAM market and increase bit output without competing directly with Micron's advanced product lines.

Quake in the DRAM Market

In general, the supply of DRAM memory will remain very tight for some time to come. For example, Samsung's DRAM production will only be increased by 5% to 4 million wafers this year, as the trade magazine DigiTimes reports. The measure is being taken even though the DRAM industry as a whole can expect production growth of 16 to 17% according to IDC forecasts. At the same time, customer demand is likely to increase by up to 30%.

Samsung's total production of DRAM wafers will amount to eight million wafers this year. Although Samsung, Hynix and Micron are fully booked for the whole of 2026, there seems to be little hope of increasing production sufficiently to meet demand.

While Trendforce assumes relief until 2027 based on the latest Micron announcement, analysts at IDC believe that the DRAM shortage could last until 2028.

As a result, DRAM prices are likely to rise by 47% according to Gartner and 33% according to Bank of America. According to Counterpoint Research, the price of DDR5 modules, which currently stands at USD 50, could double this year.

A semiconductor wafer manufactured by Micron containing memory ICs. With the help of the CHIPS and Science Act, Micron will make what it claims is the largest investment in memory chips in U.S. history. (Image:Micron)

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