TAIPEI (Taiwan News) — Powerchip Semiconductor Manufacturing Co. (PSMC) said Saturday it plans to sell a fab facility in Miaoli to US chipmaker Micron.

PSMC signed a letter of intent with Micron to transfer ownership of its P5 wafer fab in Tongluo, Miaoli, for NT$56.9 billion (US$1.8 billion). The transaction is expected to be completed in phases over the next 18 months, per UDN.

PSMC Chair Frank Huang (黃崇仁) said the deal is mutually beneficial. He said the cash injection will help PSMC boost production of high-value wafer products at its P3 fab in Hsinchu.

He added PSMC will join Micron’s domestic DRAM packaging supply chain and that Micron will provide technical support for PSMC’s advanced chip production, per CNA.

The sale of the Tongluo fab and future collaboration between PSMC and Micron will further consolidate Taiwan’s role in the rapidly growing market for AI-related technologies. Micron’s executive vice president of global operations said the purchase will greatly enhance the company’s production capacity in Taiwan.

PSMC equipment and personnel at the Tongluo fab will be transferred to facilities in Hsinchu over the coming months.