[News] PSMC Core Business Reportedly Swings to Profit in Q1; Micron Deal Adds Strategic Upside
Following Micron’s completion of its acquisition of Powerchip Semiconductor Manufacturing Corp’s Tongluo P5 fab in March, the Taiwanese chipmaker provided further operational updates. According to Central News Agency, PSMC said at its annual general meeting on April 10 that first-quarter operations rebounded, returning its core business to profitability.
Notably, Central News Agency, citing company president Martin Chu, reports that PSMC’s foundry prices began to rise in the first quarter, with the impact expected to materialize from June as higher-priced wafers enter production.
Chu added this price-up cycle is expected to lift revenue in June, with stronger momentum in the second half of 2026.
Micron Deal Delivers Strategic, Financial Upside
According to Central News Agency, citing Chu, the agreement with Micron goes beyond a straightforward asset sale and is expected to generate three key benefits: a stronger financial structure, access to Micron’s HBM supply chain, and upgraded DRAM process capabilities. Synergies from the partnership are projected to emerge within 1.5 to 2 years, the report notes.
The report adds that the transaction was completed as scheduled in mid-March, with US$1.36 billion received at closing, while the remaining US$440 million is set to be paid by the end of 2027.
Liberty Times reports that Micron initially approached PSMC ahead of Lunar New Year to acquire its P5 fab amid urgent capacity needs. However, PSMC reportedly pushed back on a pure asset sale, insisting any deal be structured with business collaboration to ensure meaningful value creation.
After three weeks of negotiations, Micron agreed to a broader partnership, including outsourcing its intermediate PWF (wafer fabrication) process to PSMC and providing a US$300 million interest-free-equivalent funding package for equipment purchases, while also committing to wafer take-up with guaranteed margins, according to Liberty Times.
As Liberty Times reports, PSMC’s deal with Micron comprises three key components: a US$1.6 billion (about NT$50.4 billion) plant sale to repay debt tied to the P5 fab; a US$200 million (about NT$6.3 billion) technology service fee to upgrade equipment and improve production efficiency; and an HBM-related contract manufacturing arrangement, under which Micron will prepay US$300 million (nearly NT$10 billion) to fund equipment procurement and cleanroom investments.
According to Central News Agency, PSMC has begun building out support for Micron’s high-bandwidth memory (HBM) back-end wafer fabrication (PWF) operations, effectively integrating the company into the U.S. memory giant’s advanced HBM packaging supply chain.
According to Micron, the Tongluo site will extend its vertically integrated mega campus in Taichung, located about 15 miles away. The facility is slated to begin meaningful shipments by fiscal 2028, with a second fab of similar scale already planned—construction is set to start by end-FY2026, adding roughly 270,000 square feet of cleanroom space.
Read more
- [News] Micron Plans 2nd Tongluo Facility After PSMC P5 Acquisition; Construction to Start by FY26
- [News] Micron Reportedly Schedules March 26 Tool Move-In at PSMC Tongluo Fab, Signaling Next Deal Phase
(Photo credit: PSMC)
