Micron to purchase Qimonda share in Taiwan joint venture 

Shortly after announcing the closure of a NAND flash memory plant in Boise, and the elimination of 1,500 Idaho jobs, Boise-based Micron Technology made it public Oct. 12 that it had entered into an agreement with Munich-based chipmaker Qimonda AG to acquire the firm’s 35.6 percent share in Inotera Memories, a Taiwanese joint venture it operates with Nanya Technology Corp.

The deal, widely speculated about since May, would be completed in two phases and cost Micron a total of $400 million in cash. The first phase, expected within the next week, would see Micron purchase 18 percent of Inotera for $200 million. The remaining 18 percent would be acquired for an additional $200 million and after regulatory review. Micron said it had obtained $285 million in term loan financing “from strategic sources at favorable terms” to pay for the acquisition.

Purchasing Qimonda’s stake in Inotera makes Micron partners with Nanya in two joint ventures – the other being MeiYa, which the companies set up earlier this year.

“This new relationship with Inotera will increase Micron’s competitiveness by further leveraging our current MeiYa joint venture with Nanya,” Micron Chairman and CEO Steve Appleton, said in a company release. “Micron will gain greater scale in DRAM, reduce our operating expenses per wafer and have access to a very cost competitive operation.”

Inotera currently produces 120,000 300 millimeter wafers per month at two fabrication facilities in Taiwan. Following the acquisition, Micron said it will ramp down that capacity over a period of months, and ultimately cease investments in MeiYa, redirecting them to Inotera.

Under the terms of the deal, Micron would have access to half of Inotera’s manufacturing capacity and would use at least part of it to produce Stack DRAM products for itself and Nanya.

According to reports, Qimonda, which has suffered badly in the current glutted chip market, will book a loss of about $400 million on the sale and likely cut about 3,000 jobs from its global operations. It has been rumored for months that Micron would take advantage of Qimonda’s weakened position by buying some, or all, of parent company Infineon’s 77.5 percent share in the company. Infineon officials have reportedly held talks with several potential buyers, but their outcome is unclear as the memory chip market continues its downturn. Micron officials have refused to comment on whether the company is looking at acquiring Qimonda.

Micron’s recently announced restructuring would see it cut 15 percent of its global workforce, or about 2,850 jobs, over the next two years. The company expects to spend about $60 million on the restructure, but realize a benefit to next year’s cash operating margin of more than $175 million. 

Shares of Micron stock were trading steadily at about $4 toward midday, up 46 cents from the opening bell.

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