Micron (MU.US) acquires a Taiwanese wafer factory, investment banks are optimistic. Stifel says it achieves a "strategic leap."

Investment bank Stifel pointed out that Micron Technology, Inc. (MU.US) plans to acquire a chip manufacturing plant of Taiwan's Powerchip Semiconductor Manufacturing Corporation for $1.8 billion in all-cash, forming a synergistic effect with its existing DRAM production capacity layout and providing a faster capacity expansion path to address the current DRAM shortage. The transaction is expected to be completed in the second half of 2026 and is expected to significantly contribute to Micron's DRAM wafer production in the second half of 2027. Following the announcement, Micron's stock price rose 2% in early trading on Tuesday. Stifel reaffirmed its "Buy" rating on Micron in its latest report and significantly raised its target price from $300 to $360. Strategic synergies and capacity acceleration Stifel analyst Brian Chin stated in a report to investors: "The growth of artificial intelligence cloud infrastructure has absorbed a large amount of DRAM production capacity, leading to the current supply shortage. To shift more storage bit volume to cloud services and enterprise clients, Micron has reduced shipments to China and recently lowered the proportion of supply to retail consumers." He further pointed out: "The Tongluo plant of Powerchip Semiconductor (located in Miaoli, Taiwan) has strong synergies geographically, conveniently located just north of Micron's advanced wafer facility, packaging, and High Bandwidth Memory (HBM) advanced packaging facilities in Taichung." "From a tactical perspective, this acquisition provides Micron with a faster path for capacity output, similar to the strategy of acquiring a liquid crystal panel factory in Taiwan for advanced packaging/back-end construction," Chin added. Global capacity deployment is also progressing in parallel. Less than a week before the disclosure of this acquisition plan, Micron had just started construction on its $100 billion memory manufacturing campus in Onondaga County, New York. The company stated that the campus will become the largest semiconductor manufacturing base in the United States.