Micron snaps up Inotera shares

ONLY DAYS after Micron Technology said it would axe 1,500 employees, slashing 15 per cent of its global work force, the firm has announced it’s snapping up 35.6 per cent ownership of Taiwanese DRAM maker, Inotera Memories.

Inotera is the joint venture lovechild of Qimonda and Nanya Technology, and Micron says it will cough up $400 million in cash for Qimonda’s stake in the firm, paying NT$10.9 (US $0.34) a share. Inotera's share price has plummeted 68 per cent in five months from a 2008 peak of NT$29.20 ($0.90).

Inotera has two 300-millimeter wafer fabs which churn out about 120,000 wafers a month. Now Micron will take over half of this manufacturing capacity, with the other half staying under Nanya’s control.

Micron says it plans to get Inotera onto its Stack DRAM model, from the trench technology it currently uses, by the end of the year, a move which would also benefit Nanya.

The deal will be split into two parts over about six weeks, with Micron planning to buy about 18 per cent of Inotera next week for $200 million in cash. The second part of the deal will go through if and when the Taiwan Federal Trade Commission gives the transaction a green light.

The deal is believed to be a good one for all involved, helping to slow down the glut and oversupply of chips in the industry and giving Inotera access to next generation tech.

Steve Appleton, Micron Chairman and CEO noted his firm would "gain greater scale in DRAM, reduce our operating expenses per wafer and have access to a very cost competitive operation".

As news hit the Taiwanese markets, Inotera shares shot up 6.8 per cent, while Nanya Technology, which owns another 35.6 per cent of Inotera, fell 3.5 per cent. µ