Powerchip shares jump after Micron moves to buy Taiwan fab for $1.8 billion

Shares of Taiwan's Powerchip Semiconductor Manufacturing Corp 6770.TW rose nearly 10% on Monday, after U.S. memory chipmaker Micron Technology MU.O said it would buy a fabrication plant from the company.

Micron Technology said on Saturday it had signed a letter of intent to acquire Powerchip's P5 fabrication site in Tongluo, Miaoli County, Taiwan, for $1.8 billion in cash.

Powerchip is one of Taiwan's major semiconductor foundries and produces both legacy chips and memory chips.

Micron said it expects the deal to help boost its output of dynamic random access memory (DRAM) wafers beginning in the second half of 2027.

The purchase will add about 300,000 square feet of cleanroom space, a highly controlled environment needed for chip production, the company said. It will allow Micron to ramp up DRAM production in phases at a time when global demand for memory continues to outpace supply, the company added.

Research firm TrendForce said Micron’s acquisition of Powerchip’s Tongluo fab will help Micron expand its advanced-process DRAM capacity, creating room for an upward revision to global DRAM supply in 2027.

It said the capacity contribution from the first phase of the Tongluo fab in the second half of 2027 will be equivalent to more than 10% of Micron’s global capacity in the fourth quarter of 2026.

Micron is one of only three major suppliers of high bandwidth memory (HBM) chips essential to AI technology, alongside South Korea's Samsung 005930.KS and SK Hynix <000660.KS >.

Micron CEO Sanjay Mehrotra said last month he expects memory markets to remain tight beyond 2026. The company's shares gained a whopping 240% in 2025, far outpacing the benchmark chip index's .SOX 42% gain.

Micron has been operating in Taiwan for more than 30 years and is the island's largest foreign direct investor, according to Micron Taiwan's website. Its facilities in Taichung, Taiwan, are a key production hub for DRAM and HBM products.

Powerchip said in a statement on Saturday that Micron will establish a long-term foundry relationship with the company for DRAM advanced-packaging wafer manufacturing, and will assist Powerchip in enhancing its specialty DRAM process technologies.

Micron said the transaction is expected to close by the second quarter of 2026, subject to regulatory approvals.

-Wen-Yee Lee/Reuters