Micron Technology has increased its ties with Nanya Technology by agreeing to buy a significant 35.6% stake in in Inotera Memories for $400m in cash.
Effectively Micron is buying the stake, owned by Qimonda, in Inotera Memories, Taiwan-based DRAM memory manufacturer.
While some observers have identified German DRAM supplier Qimonda as being the company most at risk due to the current conditions, marketwatcher iSuppli believes the company may be more secure than its competitors.
“Qimonda actually has a relatively good cash balance and a low debt ratio for potential leverage in the future compared to many other DRAM suppliers,” said iSuppli.
Micron said it had obtained $285m in term loan financing commitments from strategic sources to help finance the deal.
Inotera operates two 300mm wafer fabrication facilities producing a total of 120,000 wafers per month.
Under the agreement, Micron will acquire access to half of the total manufacturing capacity of Inotera, with the other half allocated to Nanya.
“Micron will gain greater scale in DRAM, reduce our operating expenses per wafer and have access to a very cost competitive operation,” said Steve Appleton, Micron chairman and CEO.
Micron will also share its industry-leading Stack DRAM technology with Inotera for the production of Stack DRAM products for Micron and Nanya.
The transaction will be completed in two stages, with Micron purchasing half of Qimonda’s stake, or about 18% of Inotera, for $200m in cash within approximately the next week — subject to certain government approvals and other customary conditions.
The remaining approximate 18% stake in Inotera will be acquired upon receipt of Taiwan Federal Trade Commission approval and other customary conditions.