Micron’s Strategic Acquisition to Accelerate Memory Production

In a decisive move to address the global shortage of high-performance memory, Micron Technology has announced a major expansion of its manufacturing footprint. The company is leveraging a strategic “brownfield” acquisition to bring new DRAM capacity online significantly faster than building from scratch.

Capitalizing on Operational Momentum

The announcement comes during a period of exceptional financial performance for the memory chip giant. For its first quarter of fiscal 2026, Micron reported revenue of $13.64 billion, a 57% year-over-year increase. Net profit surged by 180% to $5.24 billion, with earnings per share of $4.78 comfortably surpassing analyst forecasts.

This strength is fundamentally driven by the artificial intelligence supercycle. The company has stated that its entire production of High Bandwidth Memory (HBM) for 2025 and 2026 is already sold out. This scarcity grants Micron significant pricing power, with DRAM prices projected to climb an additional 40 to 50% in the current quarter. Profitability metrics reflect this favorable environment, as the gross margin has expanded from 25% to 45% within a single year.

The Taiwan Facility Deal

Over the weekend, Micron signed a binding letter of intent (LOI) to acquire the P5 fabrication facility in Tongluo, Taiwan, from Powerchip Semiconductor Manufacturing Corp (PSMC). The all-cash transaction is valued at $1.8 billion.

This approach allows Micron to bypass the typical three-to-five-year timeline required to construct a new semiconductor plant. The existing 300-mm wafer cleanroom spans approximately 300,000 square feet. Following the anticipated close of the deal in the second quarter of 2026, Micron plans to swiftly retool the site. The goal is to ramp up DRAM production substantially in the second half of 2027.

Once fully operational, the facility is expected to contribute an additional 50,000 12-inch wafers per month. This increment is projected to boost Micron’s annual DRAM output by roughly 10 to 15%, helping to bridge the supply gap until new megafabs—such as its ongoing project in New York state—are completed.

Should investors sell immediately? Or is it worth buying Micron?

Market Reaction and Valuation Context

Investors have responded positively to the company’s strategy and robust results. The stock reached a new 52-week high, closing at $362.75 on Friday. This price point caps off an impressive 12-month rally of over 250%.

Despite this substantial advance, the valuation picture remains constructive for many analysts. The forward price-to-earnings ratio stands at approximately 10.5, a level considered moderate given triple-digit earnings growth rates. From a technical perspective, the share price continues to trade above key moving averages. A 14-day Relative Strength Index reading of 44.7 does not indicate an overbought condition, even after a near 60% surge over the past 30 days.

Path Forward and Considerations

Attention now turns to the regulatory approval process for the PSMC transaction, which is slated for completion by Q2 2026. Market observers are also monitoring the broader geopolitical landscape, including discussions on tariffs in the United States and the push to build domestic HBM capacity—a trend Micron’s New York expansion directly addresses.

Financially, the acquisition is supported by a strong liquidity position, with the company holding cash reserves of around $12 billion. Several equity researchers have recently raised their price targets for Micron shares to a range of $400 to $450, maintaining strong buy recommendations.

If the integration of the Taiwan facility proceeds smoothly and AI-driven demand persists, this strategic acquisition could serve as a crucial lever for sustaining Micron’s current growth trajectory in the coming years.