Micron, Tesla Advance U.S. Strategic Supply Chains

Micron to Buy Taiwan Fab in $1.8 Billion Capacity Expansion

Micron Technology has agreed to acquire Powerchip Semiconductor Manufacturing Corporation’s P5 fabrication site in Tongluo, Miaoli County, Taiwan, in a cash deal valued at $1.8 billion. The transaction, announced on Jan. 17, 2026, includes an existing 300mm fabrication cleanroom of 300,000 square feet and is intended to expand Micron’s DRAM production capacity to meet growing global demand for memory. The deal is expected to close by the second quarter of 2026, subject to definitive agreements and regulatory approvals.

Under an exclusive letter of intent, Micron will assume ownership and control of the P5 site and ramp DRAM output in phases, while PSMC relocates its operations over a defined period. Micron expects the acquisition to contribute to meaningful DRAM wafer production beginning in the second half of 2027. The agreement also aims to establish a long‑term relationship under which PSMC will provide post‑wafer assembly processing for Micron and receive support for its legacy DRAM portfolio.

Micron said the Tongluo facility’s proximity to its existing Taichung site will create operational synergies across its Taiwan operations. The purchase complements Micron’s broader expansion program, which includes development of a large semiconductor complex in New York, and is positioned as part of the company’s response to sustained demand from applications such as artificial intelligence and other compute‑intensive workloads that rely on DRAM.

Tesla Opens Texas Lithium Refinery to Localize EV Supply Chain

Tesla has begun operations at a new lithium refinery in Texas that the company describes as the first "spodumene to lithium hydroxide" refinery in North America. In a video posted to its North America account on X, Tesla said the facility is designed to improve "regionalized access to critical battery minerals," which it argues will support jobs, reduce emissions and advance its mission. Spodumene is a naturally occurring ore and a key source of lithium used in battery production.

Chief Executive Elon Musk called the site "the largest Lithium refinery in America" and said Tesla has built "the most advanced lithium refinery in the world" and that it is "very clean." Tesla framed the refinery as part of an effort to usher in "energy independence for North America" by moving more of the battery materials chain onshore. The development comes alongside strong U.S. demand for Tesla vehicles: the Model Y was the best‑selling EV in the country in 2025 with over 357,528 units sold, and total U.S. sales reached 589,000 units across models.

Tesla has also been adjusting its product lineup in its key markets. In the U.S., it recently showcased a 7‑seater version of the Model Y SUV, available exclusively with the Premium all‑wheel drive trim for an additional $2,500. In China, Tesla offers a 6‑seater layout, the Model Y L, which the company says has been successful in the world’s largest car market. These moves indicate ongoing efforts to broaden the appeal of its core models while deepening control over upstream materials.

Mortgage and Housing Policy Add Complexity to Rate Outlook

Recent U.S. housing and mortgage developments underscore how policy actions are influencing borrowing costs and homebuilding. Evercore ISI analyst Stephen Kim told clients that investors may be overestimating how low U.S. mortgage rates can fall in the near term following President Trump’s decision to have Fannie Mae and Freddie Mac purchase $200 billion in mortgage‑backed securities. That announcement produced a 15‑basis‑point drop in MBS yields and pushed the average mortgage rate to 6.0%, according to Freddie Mac.

Mortgage News Daily has suggested the MBS purchases alone could drive a 50‑basis‑point decline in rates, and additional housing‑related actions are expected when the president speaks at Davos. However, Evercore ISI cautioned that mortgage rates already appear to be pricing in the potential for more good news and that achieving materially lower rates is "more complicated." Kim also said the administration is likely to focus on increasing housing supply, potentially by encouraging public builders to construct more homes and prioritize growth over returning cash to shareholders, dynamics the firm described as discouraging for investors.

Separate analysis of 2026 mortgage conditions points to forecasts for the 30‑year fixed rate averaging between 6% and 6.5%, with home prices expected to rise 1% to 2%, slower than wage growth. The article noted that while President Trump has pressed the Federal Reserve for more aggressive rate cuts, including treating rate‑cut willingness as a factor in selecting Fed leadership, other policies such as tariffs and the One Big Beautiful Bill Act could add to inflation and the U.S. debt burden. Higher inflation and greater government borrowing could in turn limit how far mortgage rates fall by keeping long‑term yields elevated.

Energy Policy Highlights Role of Heavy Crude Imports

In energy markets, U.S. policy toward oil supply is also in focus. Despite being the world’s largest oil producer and pumping more crude than it consumes, the U.S. is seeking additional heavy crude supplies from Venezuela. Analysts cited the specialization of Gulf Coast refiners in processing heavy, high‑sulfur "sour" crude, while most U.S. production is lighter, lower‑sulfur oil. Nearly 70% of U.S. refining capacity runs most efficiently on heavier crude, and about 90% of U.S. oil imports are heavy sour barrels.

Venezuela holds the world’s largest proven oil reserves, estimated at about 303 billion barrels, mostly extra‑heavy crude in its Orinoco Belt. Securing a sizeable share of this supply could help the U.S. reduce dependence on other heavy‑crude exporters such as Mexico, Canada, Saudi Arabia, Kuwait, Russia and Iran, while enabling greater exports of refined gasoline and diesel. Officials said Gulf Coast refineries are well‑positioned to process such crude, and that additional Venezuelan supply could help cap fuel prices by adding potential capacity, although industry executives described current Venezuelan investment conditions as "uninvestable" under existing laws.

Live Events and Entertainment Poised for 2026 Boost

Beyond autos, semiconductors and energy, analysts see major global events shaping U.S. service sectors. Bernstein expects the 2026 FIFA World Cup, hosted across North America, to be a "landmark catalyst" for U.S. live events by driving unprecedented domestic and global attention. The firm argues the tournament will increase sports engagement during summer 2026 and create spillover benefits for broader live entertainment, especially as traditional formats like cinemas and linear television cede consumer spending to experiential events.

Bernstein recommends overweight exposure to U.S. live entertainment into 2026 and has upgraded Liberty Formula One to Outperform. The brokerage said 2026 could provide multiple tailwinds for Formula One, including improving race economics, media rights momentum and profitability recovery at events such as the Las Vegas Grand Prix. It also reiterated positive views on Live Nation and TKO Group as core beneficiaries of strong live entertainment fundamentals, noting that 2026 may be part of a longer runway that extends into the Los Angeles Olympics rather than a one‑off peak.