Here’s a simple story about supply and demand: artificial intelligence needs a lot of memory, and Micron Technology (MU) is buying more factories to make it. The memory-chip maker just closed on its purchase of a semiconductor plant in Taiwan, a move squarely aimed at feeding the AI hardware boom.
The company said on Sunday it now fully owns the P5 manufacturing location in Tongluo, Taiwan, previously operated by Powerchip Semiconductor Manufacturing Corporation (PSMC). This follows an agreement Micron first disclosed back in January. The idea is pretty straightforward—the Tongluo site will work alongside Micron’s existing operations in Taiwan and connect to its larger Taichung mega campus.
So why does this particular factory matter? Because Micron isn’t just adding any capacity; it’s tying this site to a longer-term plan to crank out more advanced DRAM, including the high-bandwidth memory (HBM) that’s become the lifeblood of AI servers. The company described the acquired property as having about 300,000 square feet of 300mm cleanroom space ready to go. It sits roughly 15 miles from Taichung and is meant to function as an add-on to Micron’s vertically integrated manufacturing setup in the region.
“The Tongluo facility complements our Taiwan operations and is a critical component of our global expansion plans,” said Manish Bhatia, executive vice president of global operations at Micron. “Memory is a strategic asset that dictates AI product performance, and the acquisition and phased ramp of this site strengthens our ability to capitalize on these significant opportunities.” He also thanked the Taiwan government and various partners for helping accelerate the production ramp.
But Micron isn’t stopping with just one building. The company also plans to construct a second facility of similar size at the Tongluo site, which would add about 270,000 square feet of additional cleanroom space. The goal is to break ground by the end of fiscal 2026. This aggressive expansion is a direct response to the soaring demand for AI hardware, which has turned HBM into a hotly contested market.
The market seems to like the story. Last week, Wedbush analyst Matt Bryson maintained an Outperform rating on Micron and raised his price target from $320 to a bold $500. And on Monday, Micron shares were up 4.25% at $444.25 in premarket trading, hovering near the stock’s 52-week high of $455.50.
