Micron Technology Inc. said late Thursday it plans to buy out Intel Corp.’s share of a flash memory joint venture that the two chip makers have participated in for more than a decade.
Under the previous agreement, Micron will sell 3D Xpoint memory wafers to Intel for one year after the acquisition. At the end of the transaction, IM Flash will become a wholly-owned subsidiary of Micron, and all its employees will be incorporated into Micron’s technology R&D and manufacturing team in Lihai, Utah. It is understood that IM Flash produces 3D Xpoint and is mainly used in data centers and high-end computers.
Micron MU, -2.48% agreed to pay Intel $1.5 billion for its stake of their IM Flash Technologies joint venture, and expects to close the deal in six to 12 months after it is able to exercise call options on Jan. 1. On a conference call, Chief Financial Officer Dave Zinsner said Micron will pay for the buyout from free cash flow while continuing with its plan to buy back its own shares.
“We ran the calculus whether that was a good deal and we think the [return on investment] on this is very good,” Zinsner said on the call, noting that a total of $6 billion had been invested in IM Flash’s Lehi, Utah-based facility.
