Micron Buys Taiwan Factory for “AI Overhaul”

Micron Technology has found a way to quickly expand its chip production capacity for artificial intelligence. Instead of building factories from scratch, the company plans to acquire an existing PSMC plant in Taiwan for $1.8 billion.

Full Equipment Replacement

The factory in Tianluo was only commissioned in May 2024, but Micron plans a complete equipment replacement and installation of its own DRAM production lines. The modernization and transition process will take 18 months, with the facilities expected to start operating in the second half of 2026.

Focus on HBM and Why It Matters for the AI Market

The main goal of the acquisition is to expand production of high-bandwidth memory (HBM), a critical component for NVIDIA and AMD accelerators. 

The collaboration between Micron and PSMC will go beyond a simple purchase agreement. PSMC will become a key partner for Micron in HBM testing and final assembly processes. Additionally, the acquisition will create a strong logistical hub, as the new facility is located next to Micron’s existing plant.

Benefits for PSMC

Although the factory is sold at a loss below production cost ($2.5 billion), the deal is strategic for PSMC. The proceeds will help the company modernize its other five plants, leading to the production of more profitable products, including 3D memory. The deal will also allow PSMC to update its DRAM manufacturing technologies.