Micron Acquires Taiwanese Semiconductor Plant, Expands DRAM Production

U.S. semiconductor manufacturer Micron Technology will acquire a semiconductor production facility in Taiwan for $1.8 billion (approximately 2.655 trillion won).

According to Micron on January 19 (local time), the company recently signed a letter of intent to acquire the "P5 fab" of Taiwanese semiconductor company PSMC, located in Miaoli County, for $1.8 billion in cash.

Micron Technology logo. Photo by Reuters Yonhap News

Micron stated that this deal will allow the company to increase its DRAM production capacity starting in the second half of next year.

The company explained, "This acquisition includes the existing 300,000-square-foot (27,871-square-meter) '300mm fab cleanroom,' and will further strengthen Micron's position to meet rising global memory demand."

Manish Bhatia, Executive Vice President of Global Operations at Micron, said, "In a market where demand continues to outpace supply, we will be able to increase production and better serve our customers," adding that the facility's proximity to Micron's existing sites will create synergy effects.

According to Micron, the transaction is expected to close by the second quarter of this year, pending regulatory approval. After the deal is completed, Micron will gradually build out production facilities on the site and expand output.

Makoto Tsuchiya, Senior Economist at economic analysis firm Oxford Economics, stated in a recent report, "The ongoing semiconductor shortage stems from strong demand for high-bandwidth memory (HBM) chips used in artificial intelligence (AI) data centers," and added, "As semiconductor manufacturers focus their capabilities on producing more advanced chips with higher profit margins, production capacity for conventional memory chips used in various electronic devices such as PCs and smartphones is gradually declining." He further predicted, "Memory chip prices will continue to rise this year."

Micron's stock closed at $362.75 on the New York Stock Exchange on January 16, up 7.76% from the previous trading day. Micron's share price has risen more than 15% so far this year.