Intel Sells Stakes In 2 Wafer Fabs To Micron; Revamps Flash Deal
forbes.com 
Intel announced that it has restructured its flash memory partnership with DRAM-maker Micron Technology.
Terms of the deal call for Intel to sell its stake in two wafer factories – one in Singapore, the other in Virginia – for about $600 million. Intel will get half of the proceeds in cash, with the rest “deposited with Micron,” with the funds eventually to be refunded or applied to Intel purchases of NAND flash memory chips.
Intel said the deal also extends the companies’ NAND flash joint development program and expands it to include emerging memory technologies.
Intel said the revised deal gives it “better flexibility to meet growing demand for SSDs and other products.”
The Intel/Micron joint venture manufacturing facility in Lehi, Utah “will continue to operates with minimal changes” to current operation.
The deal is expected to close in the first half.
Stifel Nicolaus analyst Kevin Cassidy is bullish on the deal for Micron. “In our view this transaction is positive for Micron, as the company is increasing its trade NAND manufacturing capacity, which should lead to higher gross margin,” he writes. “In addition, the expanded development JV increases confidence that Micron will be positioned with future memory options beyond the 3D Vertical NAND technology currently in development with Intel.” Cassidy maintains a Buy rating on the stock, while boosting his target price to $10.50, from $9.
Intel shares are up 36 cents, or 1.3%, to $27.25; Micron is up 48 cents, or 5.6%, to $9.04. |
