Micron to buy out Intel’s share in joint venture IM Flash Technologies for $1.5 billion

Micron

Until closure, the companies to continue manufacture 3-D XPoint memory products at the Utah fab, jointly.

Micron Technology Inc lately announced the plan to take full control of IM Flash Technologies, which is its joint venture with Intel Corp. According to Micron, the deal terms include payment of about $1.5 billion in cash, as well as taking over Intel’s debt to the venture, which was about $1 billion as of August 2018.

IM Flash (Intel-Micron Flash) is the semiconductor company that produces 3D XPoint used in data centers and high-end computers. Reportedly, the joint venture is already consolidated in Micron’s reported financial statements.

Sanjay Mehrotra, President and Chief Executive, Micron, stated, “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.”

Deal to close in mid-2019

Initially, Intel and Micron contributed about $1.2 billion each in order to set up IM Flash Technologies in 2006. Micron would be able to exercise call options on January 1, 2019, and the transaction is expected to close between 6 and 12 months after Micron exercises the option. In July 2018, both the firms decided to complete work by the first half of 2019 on developing the second generation of 3D XPoint technology and to pursue operations independently, which meant to improve storage performance and reduce server memory costs.

Micron to sell 3D XPoint memory wafers to Intel

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, Utah, United States.

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.