Micron to Acquire Powerchip Taiwan Fab for $1.8 B, Boost DRAM Capacity by H2 2027
Micron signed an exclusive Letter of Intent to acquire Powerchip’s P5 fab in Tongluo, Taiwan for $1.8 billion, including a 300,000 sq ft cleanroom, with deal expected to close by Q2 2026. The acquisition will enable phased DRAM wafer production ramping beginning H2 2027, enhancing Micron’s capacity to address global memory demand.
1. Stellar 2025 Performance Driven by AI Memory Demand
Micron delivered a phenomenal 239.1% gain in its share price during calendar 2025, significantly outpacing the 16.4% rise in the S&P 500 and the 20.4% advance in the Nasdaq Composite. This surge was underpinned by robust pricing power and insatiable demand for high-bandwidth memory (HBM) chips used in artificial-intelligence processors. In its fiscal year ending August 28, 2025, the company reported revenue of $37.38 billion, up 48.8% from $25.11 billion a year earlier, while non-GAAP earnings per share leapt to $8.29 from $1.30.
2. Fiscal Q1 2026 Results and Full-Year Sell-Out of AI Memory Chips
For the quarter ended November 27, 2025, Micron posted revenue of $13.64 billion, a 56.6% increase year-over-year, and adjusted EPS of $4.78, up 167%. Following these results, management announced that orders for HBM products are fully booked through the end of calendar 2026, reflecting the company’s estimate that it can meet only 60% of overall AI memory demand. Concurrently, Micron is reallocating resources away from consumer-oriented DRAM and NAND products to focus exclusively on enterprise and data-center memory solutions.
3. Expansion of Manufacturing Footprint in Asia and the U.S.
On January 16, 2026, Micron broke ground on a new fabrication facility in upstate New York, representing a multibillion-dollar investment designed to add hundreds of thousands of wafer starts per month by 2028. A day later, the company signed a letter of intent to acquire a 300,000-square-foot cleanroom from a Taiwanese foundry at a cost of $1.8 billion. This Tongluo site acquisition is slated to close by Q2 2026 and is expected to contribute meaningful DRAM output beginning in H2 2027, complementing existing operations in Taichung.
4. Outlook: Supply Constraints and Long-Term Growth Prospects
With current production able to satisfy only three-fifths of AI memory requests, Micron projects sustained revenue growth above 50% year-over-year through fiscal 2026. Gross margins have expanded from 25% to 45% in the past year thanks to chip shortages and elevated pricing. Analysts forecast adjusted earnings per share rising toward $41.40 within 18 months. Management’s guidance for Q2 includes record levels of revenue, gross margin, EPS and free cash flow, underscoring confidence in extending the company’s high-growth trajectory well into the next decade.