Micron signs $1.8 billion LOI to buy Powerchip Tongluo fab in Taiwan

Micron Technology has signed an exclusive Letter of Intent to acquire Powerchip Semiconductor Manufacturing Corporation’s P5 fabrication site in Tongluo, Miaoli County, Taiwan, for US$1.8 billion in cash, the company announced in a GlobeNewswire release datelined Boise, Idaho. The deal covers an existing 300mm fab cleanroom of roughly 300,000 square feet and would give Micron immediate ownership and control upon closing, subject to final agreements and regulatory approvals.

The LOI sets an anticipated closing by calendar Q2 2026 and sketches a phased plan to equip the site and ramp DRAM production. Micron expects the Tongluo acquisition to begin producing “meaningful DRAM wafer output” in the second half of calendar 2027. As part of the transition, Powerchip will relocate its Tongluo operations over a specified time, and the two companies intend to build a long-term relationship for Micron’s post-wafer assembly processing while supporting Powerchip’s legacy DRAM portfolio.

“This strategic acquisition of an existing cleanroom complements our current Taiwan operations and will enable Micron to increase production and better serve our customers in a market where demand continues to outpace supply. The Tongluo fab’s close proximity to Micron’s Taichung site will enable synergies across our Taiwan operations,” said Manish Bhatia, Micron’s executive vice president of global operations.

The purchase is explicitly framed as complementary to Micron’s broader global expansion and capacity strategy. By adding a large, ready-made 300mm cleanroom near its existing Taichung operations, Micron aims to accelerate capacity additions compared with building a new greenfield fab. The timetable, however, underscores that this is not an immediate supply shock: the projected start of meaningful wafer output in H2 2027 means any incremental capacity will reach the market only after roughly a year and a half of equipment installation and ramp.

For investors, the acquisition reinforced markets’ bullish view of Micron’s growth trajectory. The company’s market capitalization exceeds $408 billion and its stock was trading near a 52-week high of $365.81 at the time of the announcement, with 22 analysts recently revising earnings estimates higher and the firm reporting revenue growth of 45.43% in the last twelve months. The deal’s cash price and LOI structure signal a prioritization of rapid capacity access over the longer lead times of new builds.

Policy and regulatory scrutiny will be a key near-term variable. The LOI explicitly conditions closing on required regulatory approvals. Taiwan’s central role in global semiconductor manufacturing means approvals will likely consider industrial, trade and investment implications, and any cross-border equipment imports or technology transfers will be monitored by relevant authorities.

Strategically, the transaction contributes to an ongoing industry trend toward consolidation and targeted acquisitions to secure memory capacity in the face of tight DRAM supply. Because the ramp is phased and not immediately transformative, the acquisition is more likely to affect market balances by late 2027 than alter pricing in the months ahead. Analysts and market participants will be watching Micron’s equipment spending, the pace of the Tongluo ramp, and the details of the final purchase agreement as indicators of how quickly additional DRAM wafer supply will arrive.