8-KMaterial AgreementsExhibits & Filings

MICRON TECHNOLOGY INC 8-K Report, Material Agreement (Apr 23, 2008)

Filed April 23, 2008For Securities:MU

Summary

Micron Technology, Inc. (MU) has entered into a significant definitive material agreement to form a joint venture with Nanya Technology Corporation (NTC) for the manufacturing of stack DRAM products. This joint venture, named MeiYa, will be equally owned by Micron's subsidiary, Micron Semiconductor, B.V. (MNL), and NTC, with each contributing NT$1.2 billion (approximately US$40 million) initially, and an additional US$510 million each by the end of 2009. MeiYa will operate a leased fabrication facility from NTC, focusing on 300mm DRAM wafer production. This strategic move involves substantial intellectual property transfers and licensing between Micron and NTC, which is expected to offset roughly half of Micron's current DRAM R&D expenditures through transfer fees and royalties. The companies will jointly develop process technology and product designs for stack DRAM. Micron and NTC will purchase all of MeiYa's output proportionally to their ownership, ensuring a guaranteed demand for the joint venture's production. The agreements include robust provisions for dispute resolution and capital contribution requirements, indicating a strong commitment from both parties to the success of this venture.

Key Highlights

  • 1Formation of a 50/50 joint venture named MeiYa with Nanya Technology Corporation (NTC) to manufacture stack DRAM products.
  • 2Each partner (Micron's subsidiary MNL and NTC) will initially contribute NT$1.2 billion (approx. US$40 million) in cash, with further commitments of US$510 million each by the end of 2009.
  • 3MeiYa will lease and upgrade a fabrication facility from NTC to produce 300mm DRAM wafers.
  • 4Micron will transfer and license intellectual property to MeiYa and NTC, and license technology from NTC, expecting this to offset approximately 50% of its current DRAM R&D costs through fees and royalties.
  • 5Micron and NTC will jointly develop stack DRAM process technology and product designs.
  • 6Both companies will purchase 100% of MeiYa's output, proportionate to their ownership stakes.
  • 7The agreement includes buy/sell arrangements and supermajority voting requirements for key decisions within the joint venture.

Frequently Asked Questions

The primary purpose of the joint venture, named MeiYa, is to manufacture stack DRAM products. This collaboration aims to leverage the combined expertise and resources of Micron and NTC to produce these advanced memory components.

Initially, both Micron's subsidiary (MNL) and NTC will contribute NT$1.2 billion (approximately US$40 million) each in cash. Furthermore, they have committed to contribute an additional US$510 million each by December 31, 2009.

Micron will transfer and license certain intellectual property to MeiYa and NTC, for which it will receive transfer fees and royalties. The net impact of these fees and royalties is expected to approximate one-half of Micron's current DRAM research and development expenditures.

MeiYa will be a 50/50 joint venture between Micron's subsidiary, MNL, and NTC. Initially, both parties will appoint an equal number of directors to the Board. Key decisions will require approval by a supermajority vote, ensuring mutual consent on critical matters.