TAIPEI (Taiwan News) — Powerchip Semiconductor Manufacturing Corp. will sell its Tongluo fab in Miaoli to US memory maker Micron Technology for about NT$56.86 billion (US$1.8 billion), Nikkei Asia reported Monday.
The Taiwanese foundry signed a letter of intent with Micron on Saturday, with the transaction expected to close in Q2 following regulatory approvals, per UDN. The deal values the asset at more than NT$50 billion and comes as PSMC grapples with a prolonged slump in demand for legacy chips.
PSMC ranked as the world’s 10th-largest contract chipmaker by revenue in the third quarter of 2025, according to TrendForce, but has posted net losses for nine consecutive quarters. Weak demand for mature-node chips used in displays and other consumer applications has weighed heavily on its core business.
PSMC Chair Huang Chung-jen (黃崇仁) said the surge in AI applications has revitalized the global DRAM market. He described the deal as a “win-win,” noting that the facility can rapidly expand capacity to support Micron’s growth plans.
Micron said it will use the fab to boost production of dynamic random-access memory, which is facing global supply tightness due to booming AI-related demand. Output from the plant is expected to contribute meaningfully from the second half of 2027, complementing Micron’s existing DRAM operations in Taichung.
For PSMC, the sale goes beyond balance-sheet repair and opens the door to deeper strategic cooperation. Once certified by Micron, the company expects to be incorporated into Micron’s advanced DRAM packaging supply chain, while the two sides will also collaborate at PSMC’s Hsinchu P3 fab to refine niche DRAM processes.
Huang said PSMC will reorganize production across its three 12-inch fabs and two 8-inch fabs to focus on high value-added products linked to the AI supply chain. Target areas include 3D AI DRAM, wafer-on-wafer technology, and silicon interposers.
PSMC also plans to scale back non-AI-related businesses and phase out low-margin products. The goal is to reduce reliance on mature-node foundry services and improve long-term profitability.
PSMC President Chu Hsien-kuo (朱憲國) said personnel, equipment, and product lines from the Tongluo fab will be relocated back to Hsinchu, per Business Today.
The Tongluo site, also known as PSMC’s P5 fab, began operations in May 2024 and was designed for 55-nanometer, 40-nanometer, and 28-nanometer processes. Huang said that as 3D ICs and advanced packaging go mainstream, stacking logic and memory together will define the industry’s future.
PSMC said the Micron partnership will strengthen Taiwan’s memory technology capabilities and supply-chain completeness. The company sees the deal as a key step in securing its competitiveness in an increasingly AI-centric chip landscape.
