Micron (MU) Shares Gain 5% on Plans for Second Semiconductor Plant in Taiwan

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TLDR

  • Micron has finalized the purchase of the Tongluo P5 facility from PSMC in Taiwan
  • The company intends to construct a second manufacturing plant at the same Tongluo location
  • This upcoming facility will be comparable in size to the current Miaoli County site
  • Both plants will concentrate on the production of advanced DRAM and high-bandwidth memory (HBM)
  • Work on the second facility is slated to commence by the conclusion of fiscal year 2026

Micron Technology ($MU) is strengthening its commitment to Taiwan. On Monday, the U.S.-based memory manufacturer announced its intention to develop a second production facility at the Tongluo site, which it recently acquired from Powerchip Semiconductor Manufacturing Corp (PSMC).

The firm confirmed the successful acquisition of the Tongluo P5 site located in Miaoli County. This transaction provides Micron with a strategic base that it plans to grow by building a second, similarly sized fab alongside the existing structure.

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The new plant is designed to increase the output of cutting-edge DRAM and high-bandwidth memory (HBM), which are essential components for AI accelerators and data center processors.

Groundbreaking for the new facility is planned for the end of fiscal 2026, which concludes in late August for Micron.

Doubling Down on HBM

HBM has emerged as one of the semiconductor sector’s most sought-after products. With supply currently constrained, it is a critical component for hardware from Nvidia and other AI technology providers.

As the third-largest competitor in the HBM market, trailing behind Samsung and SK Hynix, Micron is expanding its Taiwanese manufacturing footprint to help bridge that competitive gap.

The Tongluo site serves as Micron’s second manufacturing hub in Taiwan, complementing its established operations in Taichung.

Operating two fabs at a single location can optimize infrastructure expenses and accelerate production timelines, as logistics, utility systems, and engineering support are already established.

What the Tongluo Site Adds

Following its initial announcement last year, the PSMC acquisition has now officially closed. By taking over the site from the contract chipmaker, Micron gains additional floor space that can be repurposed for its proprietary DRAM manufacturing processes.

Micron has not disclosed the financial details regarding the completed purchase.

While the second Tongluo facility is expected to mirror the first in scale, Micron has not yet provided specific capacity metrics for either building.

Given that Taiwan hosts a significant portion of global advanced chip production, Micron’s expansion strengthens its proximity to vital suppliers within the regional semiconductor supply chain.

At the time of this report, MU shares had climbed 5.13%.