Micron’s (MU) planned acquisition of a chip fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corporation in an all-cash deal worth $1.8B proves to be synergistic to its existing DRAM footprint and provides a faster route to address the current DRAM shortage, according to Stifel.
The acquisition is expected to close during the second half of 2026. It is projected to contribute to meaningful DRAM (dynamic random access memory) wafer output by the second half of calendar year 2027.
Micron shares were up 2% during morning market action on Tuesday.
Stifel reiterated its Buy rating on Micron and increased its price target to $360 from $300.
“Growth of AI cloud infrastructure has absorbed DRAM output leading to the current shortage,” said Stifel analyst Brian Chin in an investor note. “To redirect more bit supply to cloud/enterprise customers, Micron has de-emphasized bit shipments to China and more recently to retail consumers.”
“PSMC’s Tongluo fab/sile (in Maoli) appears geographically synergistic, just due north of Micron’s Taichung advanced fab, assembly and advanced HBM packaging facilities,” he added.
“Tactically, the PSMC fab provides Micron with a faster path to output, not unlike prior purchases of LCD fabs in Taiwan (for advanced packaging/backend build-out),” Chin said.
The proposed acquisition of the fab site in Taiwan surfaced less than one week after Micron broke ground on its $100B memory manufacturing complex in Onondaga County, N.Y., which it said will be the largest semiconductor facility in the U.S.