Micron finds a way to make more DRAM with $1.8bn chip plant purchase
(2026/01/20)
- Reference: 1768870552
- News link: https://www.theregister.co.uk/2026/01/20/micron_powerchip_fab_acquisition/
- Source link:
Micron has found a way to add new DRAM manufacturing capacity in a hurry by acquiring a chipmaking campus from Taiwanese outfit Powerchip Semiconductor Manufacturing Corporation (PSMC).
The two companies announced the deal last weekend. Micron’s [1]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 $100B memory war: Inside the battle for AI's future [2]READ MORE
“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 [3]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.
[4]
That’s a remarkable decision given that PSMC opened the Tongluo site less than two years ago.
[5]
[6]
In its May 2024 [7]’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.
Nineteen months later, the company is walking away from Tongluo and the legacy chip business and has seemingly taken a financial hit along the way.
[8]India scores its first fab, and it looks like it was at Japan's expense
[9]Taiwan quake to hit chipmakers' capex, not chip supply
[10]Memory boom-bust cycle booms again as Samsung reportedly jacks memory prices 60%
[11]PC memory costs to climb as fabs chase filthy lucre in servers and HBM
Micron says the acquisition “complements … ongoing global expansion plans as the company invests to meet long-term demand from its customers.” The company is already building new memory fabs – it [12]announced a new one in New York State just last Friday – and late last year [13]told investors that new datacenter builds to house AI infrastructure have created a “sharp increase” in demand forecast for memory and storage that semiconductor companies won’t be able to meet for the foreseeable future.
That collision of supply and demand has sent memory prices soaring and created an environment in which Micron was able to pre-sell all the high-bandwidth memory it will produce in 2026.
[14]
Manufacturers of PCs, servers, GPUs, and smartphones have warned the cost of their wares must rise along with the cost of memory.
This deal may make matters worse for more buyers, because PSMC used the Tongluo site to make legacy DRAM products – the kind of memory used in less advanced products. With the company now exiting the legacy chip biz, that memory will also become more scarce, giving the laws of supply and demand another moment in which to work their way on markets. ®
Get our [15]Tech Resources
[1] https://investors.micron.com/news-releases/news-release-details/micron-signs-letter-intent-purchase-tongluo-site-begin-0
[2] https://www.theregister.com/2025/10/16/race_to_supply_advanced_memory/
[3] https://www.powerchip.com/en-global/insights/press-releases/content/20260117
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.powerchip.com/en-global/insights/press-releases/content/20240502
[8] https://www.theregister.com/2024/09/30/psmc_tata_bsi_india_fab/
[9] https://www.theregister.com/2024/04/05/tsmc_earthquake_capex/
[10] https://www.theregister.com/2025/11/14/samsung_price_jump/
[11] https://www.theregister.com/2025/09/24/pc_memory_price_hike/
[12] https://www.theregister.com/2026/01/16/micron_fab_breaks_ground/
[13] https://www.theregister.com/2025/12/18/micron_q1_2026/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
The two companies announced the deal last weekend. Micron’s [1]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 $100B memory war: Inside the battle for AI's future [2]READ MORE
“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 [3]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.
[4]
That’s a remarkable decision given that PSMC opened the Tongluo site less than two years ago.
[5]
[6]
In its May 2024 [7]’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.
Nineteen months later, the company is walking away from Tongluo and the legacy chip business and has seemingly taken a financial hit along the way.
[8]India scores its first fab, and it looks like it was at Japan's expense
[9]Taiwan quake to hit chipmakers' capex, not chip supply
[10]Memory boom-bust cycle booms again as Samsung reportedly jacks memory prices 60%
[11]PC memory costs to climb as fabs chase filthy lucre in servers and HBM
Micron says the acquisition “complements … ongoing global expansion plans as the company invests to meet long-term demand from its customers.” The company is already building new memory fabs – it [12]announced a new one in New York State just last Friday – and late last year [13]told investors that new datacenter builds to house AI infrastructure have created a “sharp increase” in demand forecast for memory and storage that semiconductor companies won’t be able to meet for the foreseeable future.
That collision of supply and demand has sent memory prices soaring and created an environment in which Micron was able to pre-sell all the high-bandwidth memory it will produce in 2026.
[14]
Manufacturers of PCs, servers, GPUs, and smartphones have warned the cost of their wares must rise along with the cost of memory.
This deal may make matters worse for more buyers, because PSMC used the Tongluo site to make legacy DRAM products – the kind of memory used in less advanced products. With the company now exiting the legacy chip biz, that memory will also become more scarce, giving the laws of supply and demand another moment in which to work their way on markets. ®
Get our [15]Tech Resources
[1] https://investors.micron.com/news-releases/news-release-details/micron-signs-letter-intent-purchase-tongluo-site-begin-0
[2] https://www.theregister.com/2025/10/16/race_to_supply_advanced_memory/
[3] https://www.powerchip.com/en-global/insights/press-releases/content/20260117
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.powerchip.com/en-global/insights/press-releases/content/20240502
[8] https://www.theregister.com/2024/09/30/psmc_tata_bsi_india_fab/
[9] https://www.theregister.com/2024/04/05/tsmc_earthquake_capex/
[10] https://www.theregister.com/2025/11/14/samsung_price_jump/
[11] https://www.theregister.com/2025/09/24/pc_memory_price_hike/
[12] https://www.theregister.com/2026/01/16/micron_fab_breaks_ground/
[13] https://www.theregister.com/2025/12/18/micron_q1_2026/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aW8L89Vzn-LdNQvyUi8ExAAAAwQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
Allocation to consumers: 0%
Allocation to "AI" data centres that aren't even built yet: 100%