Micron to build $24B memory chip plant in Singapore, easing global supply crunch

The US-based memory chipmaker Micron Technology has announced plans to invest $20 billion in a chip manufacturing plant in Singapore in a bid to ease global supply shortfall and boost output.

As reported by Reuters, the move signals a push to plug the gap between global demand and supply of memory chips as the tech companies are racing to build AI infrastructure, data centers and cloud computing.

As confirmed by Micron, the company aims to establish a state-of-the-art wafer fabrication facility in around 10 years, helping to meet surging market demand for NAND memory chips in the wake of rapid artificial intelligence advancements.

The generation of wafer output is expected to start in the second half of 2028. The facility will be sprawling over 700,000 square feet (65,000 sq m).

Besides this new investment, Micron is also building a $7 billion advanced packaging play for high bandwidth (HBM) chips known for its use in AI infrastructure. The production of HBM chips will start in 2027.

According to statement issued by chipmaker, “The HBM ⁠chip packaging facility in Singapore is on track to contribute to supply in 2027.”

Earlier this week, Micron was also in discussion to purchase a fabrication site from Powerchip in Taiwan for $1.8 billion, as this deal could boost its DRAM wafer output.

Micron is the fourth-largest flash memory supplier globally with 13 percent market share.

Global memory supply vs demand 

According to the analysts, the world would witness the supply crunch even in late 2027, although the main global chipmakers including Samsung and SK Hynix are planning new production lines in memory chips.

According to TrendForce analyst Bryan Ao, in the wake of high demand, the contract prices for enterprise solid-state drives could rise by 55 to 60 percent.

"The market’s demand for high-performance storage equipment has been ⁠growing much faster than ⁠expected amidst the expansion ​of AI inference applications, and major North American cloud service providers have been exhibiting robust order pulls since the end of last year to seize on opportunities of the AI agent market," he said.