8-KMaterial AgreementsFinancial EventsOther Events

MICRON TECHNOLOGY INC 8-K Report, Material Agreement (Nov 26, 2008)

Filed November 26, 2008For Securities:MU

Summary

Micron Technology Inc. (MU) filed an 8-K on November 26, 2008, detailing significant agreements related to the restructuring of its joint venture activities, particularly concerning Inotera and the termination of prior agreements related to MeiYa. The core of the filing involves new agreements establishing Inotera as a key entity for DRAM manufacturing, where Micron will transfer intellectual property for stack DRAM products and receive transfer fees and royalties. These agreements also govern the sale of Inotera's output to Micron and NTC, aiming for a 50-50 allocation, and establish a joint development program for future stack DRAM technology. Furthermore, the filing details two material loan agreements. Micron's subsidiary, MNL, received a $200 million loan from NPC (an affiliate of NTC) to finance its Inotera stake, guaranteed by Micron. Concurrently, Micron secured an $85 million loan from Inotera for general corporate purposes. These transactions signify a strategic realignment for Micron, emphasizing collaboration in DRAM production and technology development while also securing necessary financing.

Key Highlights

  • 1Micron entered into a Master Agreement and Joint Venture Agreement with NTC, MNL, MeiYa, and Inotera to govern the ownership, governance, and DRAM product manufacturing of Inotera.
  • 2Micron will transfer intellectual property for stack DRAM products to Inotera and amended agreements with NTC regarding IP transfer and licensing, receiving transfer fees and royalties.
  • 3A joint development program for stack DRAM process technology and designs has been established between Micron and NTC, with potential involvement from Inotera.
  • 4The agreements establish a supply framework where Micron and NTC will purchase all DRAM output from Inotera, generally on a 50-50 basis, with adjustments based on ownership.
  • 5Prior agreements related to the MeiYa joint venture have been terminated, including a Master Agreement, Joint Venture Agreement, Supply Agreement, and Technology Transfer Agreements.
  • 6Micron's subsidiary, MNL, obtained a $200 million loan from NPC (an affiliate of NTC) to fund its Inotera share purchase, with Micron providing a guarantee.
  • 7Micron secured an $85 million loan from Inotera for general corporate purposes.

Frequently Asked Questions

The primary purpose is to establish Inotera as a significant entity for the manufacture of DRAM products, particularly stack DRAM. These agreements involve the transfer of Micron's intellectual property to Inotera, the joint development of new DRAM technologies, and the sale of Inotera's manufactured DRAM products to Micron and NTC.

Micron secured an $85 million loan from Inotera for its general corporate purposes. Additionally, Micron guaranteed a $200 million loan provided by NPC to its subsidiary MNL, which was used to finance MNL's purchase of Inotera shares. These loans provide necessary capital for operations and investments in Inotera.

This filing signifies the termination of several material agreements related to the MeiYa joint venture. The new agreements effectively replace the prior structure, consolidating DRAM manufacturing and technology development efforts primarily through Inotera rather than MeiYa.

Micron and NTC are key partners in the restructured Inotera venture. They will jointly develop stack DRAM technology, with Micron contributing intellectual property and receiving royalties. They will also share in purchasing Inotera's DRAM output, typically on a 50-50 basis, and will share governance rights in Inotera.