Micron wants to buy remaining Intel stake in 3D XPoint joint-venture

Posted on Friday, October 19 2018 @ 10:21 CEST by Thomas De Maesschalck
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Slowly the joint-venture between Intel and Micron in the flash market is coming to an end. The firms already ceased their NAND flash memory joint-venture and now Micron announced that it wants to exercise its right to buy out Intel's remaining stake in IM Flash Technologies. The main implication here is that Micron wants full control over the supply of 3D XPoint technology, a product Intel uses for its Optane SSDs. Both companies are going their own way as Intel's Optane and Micron's QuantX have different target markets, which require different implementations.

Micron can exercise its call option starting January 1, 2019 and expects to pay about $1.5 billion in cash for Intel's stake. As part of the current agreement, Intel will be able to purchase 3D XPoint chip supply at the current favorable pricing until the end of 2019. For future Optane products, Intel will need to ink a new agreement with Micron, although the company indicated in the past that it could produce 3D XPoint at its Dalian fab in China.
Micron Technology, Inc., (NASDAQ: MU) today announced that the company intends to exercise its right to call Intel's interest in the parties' joint venture, IM Flash Technologies, LLC (IM Flash). "Micron's acquisition of IM Flash demonstrates our strong belief that 3D XPoint technology and other emerging memories will provide a unique differentiator for the company and be an essential solution for new data-hungry applications," said Micron President and CEO Sanjay Mehrotra. "This investment provides Micron with an established development and manufacturing facility and a highly skilled workforce with a strong track record of innovation and execution."

Micron can exercise the call option starting Jan. 1, 2019. The timeline to close the transaction is between six and twelve months after the date Micron exercises the call. The IM Flash joint venture is already consolidated in Micron's reported financial statements. Micron anticipates no meaningful impact to overall financial results or changes to its Fiscal 2019 capital expenditures and long-term capital expenditure target. At the time of close, Micron expects to pay approximately $1.5 billion in cash for the transaction, dissolving Intel's non-controlling interest in IM Flash as well as IM Flash member debt, which was approximately $1 billion as of Aug. 30, 2018.

In July 2018, Micron and Intel agreed to conclude their joint development of 3D XPoint technology after the completion of the second-generation node, which is expected to occur in the second half of Fiscal 2019. The two companies will independently drive their own future technology roadmaps. Micron is currently collaborating with ecosystem partners to introduce 3D XPoint products in late calendar 2019, with revenue ramp starting in calendar 2020. Joint manufacture of 3D XPoint memory will continue at the IM Flash facility in Lehi, Utah until the transaction is closed. Based on prior agreements, Micron will sell 3D XPoint memory wafers to Intel for up to a year after close. At the close of the transaction, IM Flash will become a wholly-owned subsidiary of Micron, and all IM Flash employees will become part of the Micron team focused on supporting technology development and manufacturing efforts in Lehi.


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Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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