According to the latest DRAM industry survey by TrendForce, Micron's planned acquisition of PSMC's plant in Tongluo for $1.8 billion (excluding production machinery) will establish a long-term advanced DRAM packaging foundry relationship between the two companies. This collaboration is expected to benefit Micron by adding advanced process DRAM capacity and enhancing PSMC's supply of mature process DRAM, with projections indicating potential upward revisions to global DRAM industry supply by 2027. TrendForce states that starting from the second half of 2025, demand for HBM3e and DDR5, driven by ASIC and AI inference respectively, will boost overall DRAM profit margins, prompting Micron to accelerate capacity expansion. The acquisition of PSMC's Tongluo plant includes land, factory buildings, and clean rooms. Micron is expected to gradually move in existing and newly ordered equipment from 2026 to 2027, primarily focusing on front-end equipment for advanced DRAM processes, with mass production commencing in 2027. It is estimated that the capacity contribution from Tongluo Phase 1 in the second half of 2027 will be equivalent to over 10% of Micron's global capacity in the fourth quarter of 2026. According to TrendForce statistics, Micron held a 25.7% revenue market share in the global DRAM industry in the third quarter of 2025, ranking third. Since 2024, AI has driven demand for advanced process DRAM products such as HBM, DDR5, and LPDDR5X. In addition to持续推进 its US ID1 and Singapore HBM backend capacity construction, Micron has actively acquired plants externally to shorten the capacity establishment timeline. Prior to the Tongluo plant, Micron had acquired two AUO Tainan plants, an AUO Crystal plant in Taichung, and a Glorytek plant in Taichung for various uses including Wafer Probe, Metallization, and HBM TSV. Furthermore, Micron plans to convert part of its Singapore NAND Flash clean room for DRAM Metallization use. Regarding the significance of the Tongluo plant acquisition for PSMC: its existing DRAM capacity primarily uses 25nm and 38nm processes, therefore its DDR4 production lines are currently limited to smaller capacity products. Following the recent signing of a letter of intent with Micron, PSMC is expected to obtain authorization for the 1Y nm process from Micron within the next year, with a subsequent opportunity to acquire 1Z nm process authorization. This will support PSMC in enhancing its DDR4 product capacity. This move will help PSMC maintain its process competitiveness in the Consumer DRAM market while expanding bit output, without competing with Micron's advanced product lines.
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