Intel paid $270 million for Micron’s NAND flash

Intel paid $270 million for Micron’s NAND flash
www.52RD.com　2006年2月28日　我爱研发网　EEtimes
LONDON — One of the less well-known details of the deal between Micron Technology Inc. and Intel Corp. to create the manufacturing joint venture IM Flash Technologies LLC is that Micron sold its existing NAND flash memory technology and chip designs to Intel for $270 million.
Micron did acquire a perpetual, paid-up license to use and modify and the designs, but, in essence, the NAND flash memories that the joint venture will manufacture for Intel and Micron will be Intel’s designs. This is a according to a 10-Q form filed with the U.S. Securities and Exchange Commission and dated Jan. 10, 2006.
The deal to create the joint-venture company, owned 51 percent by Micron (Boise, Idaho) and 49 percent owned by Intel (Santa Clara, Calif.), closed on Jan, 6. It is set to manufacture chips exclusively for Micron and Intel. The two parents each agreed to contribute approximately $1.2 billion each in cash, notes and assets. The companies agreed to contribute an additional $1.4 billion over the next three years and any additional investments as appropriate to support the growth of the operation.
Manufacturing is set to take place at wafer fabs owned by Micron located in Boise, Idaho, Manassas, Va. and Lehi, Utah. Intel and Micron have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of IM Flash Technologies’ NAND flash memory output and as part of these agreements, Apple agreed to prepay $250 million each to Intel and Micron.
The 10-Q form said that Intel has paid $1,196 million in in cash and notes to IM Flash Technologies while Micron paid $995 million, but intends to pay an additional $250 million in the second quarter of 2006. The 10-Q goes on to say, “Simultaneously with the closing of the joint venture transaction, Micron sold to Intel its existing NAND flash memory technology and designs for $270 million and acquired a perpetual, paid-up license to use and modify such designs.”
Micron, with its perpetual license could continue to develop flash memory along the same lines that it has been doing to date, so it is no worse off. In fact it is $270 million better off.