Micron to Pay Intel $1.3B to $1.5B for IM Flash Stake
by Anton Shilov on May 8, 2019 2:00 PM EST
Earlier this year, Micron announced their intention to buy out Intel's stake of their memory technology joint venture, IM Flash Technologies. Now, as the process gets underway, Micron is disclosing more concrete details about the transaction. According to the company's latest filing, Micron will pay Intel approximately $1.3 billion to $1.5 billion for their stake and associated debt, with the expectation of closing the deal by the end of October.
Under the terms of the joint venture deal between Intel and Micron signed in 2005, Micron controls 51% of firm and has a right to buy the remaining share under certain conditions. Intel previously sold Micron its stakes in IM Flash's fabs in Singapore and Virginia back in 2012, which left the IM Flash joint venture itself with only a single fab in Lehi, Utah. Nowadays the production facility is used exclusively to make 3D XPoint memory, which in turn is currently only used by Intel. Micron itself plans to use the fab to make 2nd Generation 3D XPoint memory that it will use for products set to be launched by late calendar 2019. Eventually, the facility will be used to manufacture post-3D XPoint memory.
Financially, most of the $1.3 billion plus price tag for Intel's stake is not for the business itself, but is for the IMFT member debt owed to Intel ($1 billion as of February 28, 2019), which means the business is only being valued at around $300 million to $500 million. Meanwhile, along with acquiring complete ownership of IMFT once the deal closes, Micron reports that the company will also recognize a financial gain of about $100 million.
The money that Intel will receive from Micron will enable it to invest in upgrading production facilities and/or building up capacity to make 3D XPoint and similar classes of memory in the future. Meanwhile, Intel will retain right to buy 3D XPoint from Micron until at least mid-2020.
Related Reading:
- Micron Exercises Option to Buyout Intel's Share of IMFT
- What Next for 3D XPoint? Micron to Buy Intel's Share in 3D XPoint Fab
- Intel and Micron To Dissolve 3D XPoint Partnership After 2019
- Intel And Micron To Discontinue Flash Memory Partnership
- Micron Starts Construction of Its Third NAND Fab in Singapore
- Micron Discontinues Lexar Business, Plans to Focus on Higher-Margin Products
Source: Micron/SEC (via Tom’s Hardware)
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Wilco1 - Wednesday, May 8, 2019 - link
What amazing new technology does Intel have up its sleeve??? You always claim that any move by Intel is amazing and super smart, no matter how bad it looks. Quark is dead. Itanium is dead. Phi is dead. Intel modems are dead. Phone SoCs are dead. Atom on lifesupport. Intel foundry is dead. 10nm is mostly dead given most 10nm fabs have been repurposed.Meanwhile AMD is on a roll and Arm chips have bridged the performance gap to SkyLake. But in your book Intel is doing better than ever!
HStewart - Wednesday, May 8, 2019 - link
Sunny Cove, Fovores and Xe are very new technologyMost exiting is Sunny Cove architexture designed. Something big is coming with it - if you look closely at the design you will notice they added second Store unit in additional to existing Store unit along with two existing load unit. Further more looking closer at the designed each load unit is join with it's own store unit - which means they can run in parallel
As for as the Intel foundry and 10nm, it not dead - 28 billion invested and 10nm
Stop making future based on past. I am an optimist and believe that something great is around the corner. Also notebook sales are up and just because desktop sales are decreasing each year means that Intel is dying - just involving toward the future.
Wilco1 - Wednesday, May 8, 2019 - link
None of those are new or revolutionary. AMD and NVidia do decent graphics cards already, you can buy them today. TSMC sells billions of chips using advanced packaging technologies today. Sunny Cove is just an iteration of SkyLake (which was itself a minor iteration etc). Evolution, not revolution.If we get 5GHz desktop chips in 10nm then you could say it is alive.
Well I'm an optimist too and I am pretty sure that AMD will do extremely well in the next few years. Similarly we'll see lots of Arm servers on 7nm and 5nm soon.
Korguz - Wednesday, May 8, 2019 - link
HStewart its architecture NOT architexture replace the X with a C ... sunny cove. is NOT a new architecture.. is just an update the the existing architecture intel has been using for what 10, 15 years now ???? intel can spend all the billions they want.. it still may not fix the issues they are now having. " Stop making future based on past. I am an optimist and believe that something great is around the corner " of course you do.. cause thats all you can see when it comes to intel... but intel has also been promising this for the last few years...Adramtech - Wednesday, May 8, 2019 - link
Micron is currently the only manufacturer of 3DXpoint until Intel starts their own production.Here are more details of what was stolen...."Chipzilla has said its electronic security system prevented Rivers from copying its "top secret" file. But the chip biz claims Rivers did manage to copy "a highly sensitive compilation of Intel personnel information," which is to say a spreadsheet with the contact details of more than 3,000 Intel employees." https://www.theregister.co.uk/2019/03/25/intel_cou...
ilt24 - Wednesday, May 8, 2019 - link
@HStewart ... "so Micron fab must be out of date"For someone who make so many pro Intel comments, you don't seem to have a clue what you are talking about. lntel's agreement with Micron included an option for Micron to buy Intel out of the Lehi Fab, Micron chose to exercise that option, Intel has no option but to be bought out. As far as being out of date, it is the only fab that can currently make 3Dxpoint, and is where gen2 of the memory was developed and it will go into production later this year. Intel is going to continue to get it's supply from that factory for the next couple of years, both gen1 and gen2 while they refit a mostly idle factory in New Mexico to produce 3DXpoint as well as develop future generations of the memory.
PeachNCream - Wednesday, May 8, 2019 - link
Competition from AMD, a lack of progress on sub-14nm production, and weak demand in the desktop market are probably all putting the squeeze on Intel. Failing to penetrate into the phone space by botching their mobile SoC a bit back can't have helped the situation. That's too significant to overlook given how little reason there is to even own an x86 PC these days. They should probably just start contracting TSMC or even Samsung to produce their chips at this point since Intel's own foundries are using Soviet-era manufacturing methods when compared to their competitors.HStewart - Wednesday, May 8, 2019 - link
Micron lab is old technologyWilco1 - Wednesday, May 8, 2019 - link
Sure that must be why Intel keeps buying 3Dxpoint from Micron for the next few years, and didn't release 10nm. They just love old out of date fabrication technologies!PeachNCream - Thursday, May 9, 2019 - link
Sorry, I'm having trouble hearing you over the rattle of the Intel employee badge hanging around your neck.