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MICRON TECHNOLOGY INC 8-K Report, Material Agreement (Sep 15, 2006)

Filed September 15, 2006For Securities:MU

Summary

Micron Technology, Inc. (MU) has filed an 8-K report on September 15, 2006, detailing a significant settlement and patent transaction with Toshiba Corporation. The core of the report involves the sale of certain Micron semiconductor technology patents and licenses for patents owned by its subsidiary Lexar Media, Inc., and its partially owned entity Acclaim Innovations, LLC, to Toshiba. In return, Toshiba will make payments totaling $288 million over several years. This agreement brings an end to all pending litigation between Lexar Media, Acclaim, and Toshiba. While the financial impact is still under evaluation by Micron, the resolution of legal disputes and the substantial cash inflow from the patent sale are key takeaways for investors. The company is actively determining the appropriate accounting treatment for this transaction.

Key Highlights

  • 1Micron Technology entered into a Settlement and Release Agreement and a Patent License Agreement with Toshiba Corporation.
  • 2Micron will sell certain semiconductor technology patents to Toshiba.
  • 3Toshiba will license patents owned by Micron subsidiary Lexar Media and the partially owned entity Acclaim Innovations.
  • 4The total payment from Toshiba for these patents and licenses will be $288 million, to be paid over several years.
  • 5This agreement resolves all ongoing litigation between Lexar Media/Acclaim and Toshiba.
  • 6Micron is currently assessing the accounting treatment and financial impact of this transaction.

Frequently Asked Questions

The total payments from Toshiba for the patents and licenses will amount to $288 million, spread over a period of years.

Yes, the agreement explicitly states that all pending litigation between Lexar Media, Acclaim Innovations, and Toshiba will be settled as part of this transaction.

Micron is currently evaluating the appropriate accounting treatment for this transaction and its impact on their results of operations. The specific financial reporting implications are still under assessment.

Beyond the $288 million in payments, Micron gains the resolution of all outstanding litigation with Toshiba, which can reduce legal expenses and uncertainty. The licensing arrangement also clarifies certain patent rights.