Micron has signed a letter of intent with Taiwanese Powerchip Semiconductor Manufacturing Corporation (PSMC) to buy its P5 fab in Tongluo in Central Taiwan. Micron and PSMC have agreed on a cash price of US$1.8 billion for the fab, which is PSMC's most recent 12-inch fab and should allow Micron to add additional 1x nm DRAM production capacity. The two companies are expecting the transaction to close by the second quarter of this year, but it doesn't mean that Micron will take over the facility from day one. Instead, Micron isn't expecting the fab to "contribute to meaningful DRAM wafer output" until the second half of 2027.

PSMC doesn't have its own 1x nm DRAM production today, as the company is still developing its own nodes, which could be part of the reason for the delayed "meaningful" output for Micron. That means that with the current equipment in place, Micron will end up with 2x nm DRAM to start with, suggesting it's DDR4 that's being produced at the fab today. According to TrendForce, the fab should be able to contribute as much as 10 percent of Micron's total DRAM output in 2027, which is not an insignificant amount. TrendForce also noted that PSMC is expecting to get a 1x nm (1Y or 1Z) DRAM license for its other fabs, to help it produce higher-density DRAM in the near future at its other fabs.