[Taiwan Chip Dispatch] Micron Acquires Taiwan PSMC Factory, Accelerates Equipment Orders and Process Transition

PSMC Expands Supply Amid AI Boom
Micron Embarks on Factory Acquisitions Worldwide
Micron’s Production Capacity Expected to Rise by 10%

As U.S. semiconductor company Micron has made a surprise acquisition of Taiwanese foundry PSMC (Powerchip)'s factory, PSMC has launched plans to advance its DRAM manufacturing processes.

According to local reports, including the Taiwan Economic Daily News on January 26, PSMC's P5 factory currently has a memory production capacity of 50,000 wafers per month and is contract-manufacturing DRAM and specialty flash memory based on its 2X-nanometer process. The global DRAM market is entering a prolonged supply shortage due to the expansion of artificial intelligence (AI) applications. In response to mounting demand pressures from its customers, PSMC has decided to make new investments to improve its memory manufacturing processes.

PSMC (Powerchip) P5 Factory, a Taiwanese foundry company. PSMC.

PSMC is accelerating its process transition. Taking into account the urgency, the board has already approved a capital increase plan, and the factory sale and strategic cooperation agreement with Micron is expected to be signed in the second quarter. After approval at this year's regular general shareholders' meeting, the company plans to immediately place equipment orders according to management's plans. The acquisition includes land, factory buildings, and cleanrooms, with both existing and new equipment to be introduced in phases between 2026 and 2027. The equipment to be installed will primarily consist of front-end process facilities for DRAM miniaturization, with mass production expected to begin in 2027.

PSMC announced that it will provide Micron with advanced DRAM back-end packaging foundry services over the long term, while Micron will support the advancement of DRAM processes at Powerchip’s P3 factory. As a result, PSMC's DRAM foundry competitiveness is expected to be further strengthened. This will not only support domestic and international memory design firms in developing high-capacity, high-speed, high-performance products, but also enhance the competitiveness of wafer-on-wafer (WOW) foundry services, helping to attract major customer demand in AI application fields.

Market research firm TrendForce predicted that this acquisition will increase Micron’s advanced process DRAM production capacity. TrendForce expects Micron’s global DRAM production capacity to improve by more than 10% in the fourth quarter of this year. In the third quarter of last year, Micron ranked third in global DRAM industry revenue market share at 25.7%. Since 2024, the AI boom has driven increased demand for advanced process DRAM such as HBM (High Bandwidth Memory), DDR5, and LPDDR5X. In response, Micron has continued to invest in its U.S. ID1 facility and Singapore HBM back-end facilities, while also shortening the time required to build production capacity through factory acquisitions.

Micron has recently been actively acquiring factories to strengthen its advanced process capabilities. Previously, it acquired AUO’s Tainan and Taichung factories in Taiwan, and is also planning to convert some NAND flash cleanrooms in its Singapore plant to DRAM production lines.

Currently, PSMC’s DRAM production is mainly based on the 25nm and 38nm processes, so its DDR4 products remain relatively low-capacity. However, after signing a memorandum of understanding (MOU) with Micron, it is now possible that PSMC will secure a 1Ynm (first-generation 10nm-class) process license within the next year, and may later expand to the 1Znm (third-generation 10nm-class) process. If this happens, PSMC is expected to increase the capacity of its DDR4 products while also strengthening its process competitiveness. Industry observers believe this will allow PSMC to maintain its position in the consumer DRAM market and increase output, while avoiding direct competition with Micron’s most advanced product lines.

Taiwan Economic Daily News = Reporter Yang Lingyuan, translation by The Asia Business Daily

*This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan Economic Daily News.

This content was produced with the assistance of AI translation services.