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This article first appeared on GuruFocus.

Micron Technology (MU, Financials) is deepening its roots in Taiwan with a $1.8 billion agreement to buy Powerchip Semiconductor Manufacturing Corp.’s P5 fabrication plant, a move aimed at meeting the growing appetite for memory chips that power artificial intelligence systems.

The Idaho-based chipmaker said the deal will add about 300,000 square feet of cleanroom space at the Tongluo, Miaoli County site. Micron expects the facility to begin contributing to dynamic random access memory wafer production in the second half of 2027. The added capacity comes as global demand for advanced memory continues to outpace supply, with AI servers, smartphones, and cloud computing driving the next wave of chip consumption.

Powerchip’s shares climbed nearly 10% after the announcement, reflecting investor optimism about the long-term partnership between the two companies. Powerchip said Micron will not only purchase the facility but also collaborate on specialty DRAM process technologies and advanced packaging.

Micron is one of the world’s top three producers of high bandwidth memory, alongside Samsung and SK Hynix, and has operated in Taiwan for more than three decades. The island remains a cornerstone of Micron’s manufacturing network and a hub for DRAM and high performance chip production.

Micron’s CEO, Sanjay Mehrotra, has said tight memory markets could persist beyond 2026. The company’s stock surged 240% last year, far outpacing the broader semiconductor index.