Micron has signed a letter of intent to acquire Powerchip Semiconductor Manufacturing Corporation's (PSMC) P5 fab in Tongluo, Taiwan, for $1.8 billion. The deal, expected to close in Q2 2026, gives Micron access to a modern 12-inch facility intended for advanced 1x nm DRAM production. However, the fab won't start contributing meaningful output until the second half of 2027.

The delayed timeline stems from PSMC's current production capabilities. The Taiwanese foundry doesn't yet have its own 1x nm DRAM technology, meaning Micron will initially run 2x nm DRAM lines—likely DDR4—on the existing equipment. This acquisition is a strategic move to secure future capacity amid tightening memory supplies and growing AI-driven demand for high-density DRAM.

Analyst firm TrendForce estimates the fab could supply up to 10% of Micron's total DRAM output by 2027. Meanwhile, PSMC is pursuing a 1x nm license for its other fabs to produce higher-density memory in the near future. The acquisition underscores Micron's aggressive push to expand its manufacturing footprint as the industry navigates a persistent shortage.