8-KMaterial AgreementsRegulation FDExhibits & Filings

MICRON TECHNOLOGY INC 8-K Report, Material Agreement (Feb 28, 2012)

Filed February 28, 2012For Securities:MU

Summary

Micron Technology Inc. (MU) filed an 8-K on February 28, 2012, detailing significant strategic agreements with Intel Corporation that reshape their joint ventures in NAND flash memory and emerging memory technologies. These agreements primarily involve Micron acquiring Intel's stake in the IM Flash Singapore (IMFS) joint venture and purchasing Intel's assets at the IMFT (IM Flash Technologies) manufacturing facility in Manassas, Virginia. Additionally, the term of the IMFT joint venture is extended, and its scope is broadened to include certain emerging memory technologies, with both companies committed to further capital contributions. These transactions, valued at approximately $600 million net for Micron, aim to streamline operations and align the companies' strategic focus on memory technologies.

Key Highlights

  • 1Micron is acquiring Intel's stake in the IM Flash Singapore (IMFS) NAND flash memory joint venture.
  • 2Micron is purchasing Intel's assets at the IMFT NAND flash memory manufacturing facility in Manassas, Virginia.
  • 3The term of the IMFT joint venture is extended to December 31, 2024.
  • 4The scope of the IMFT joint venture is expanded to include certain emerging memory technologies.
  • 5Micron and Intel will enter new supply agreements, with Intel providing Micron a $300 million deposit for product supply.
  • 6Micron and Micron Singapore expect to pay approximately $600 million net for the acquired assets and businesses.
  • 7The agreements include provisions for future buy-sell rights regarding Intel's interest in IMFT, commencing in 2015.

Frequently Asked Questions

The primary purpose is to restructure their joint ventures related to NAND flash memory and emerging memory technologies. This includes Micron taking full ownership of the Singapore NAND operations (IMFS) and acquiring specific assets from the US NAND operations (IMFT), while also extending and expanding the IMFT joint venture's focus to new technologies.

Micron, along with its subsidiary Micron Singapore, anticipates a net payment of approximately $600 million for the acquired businesses and assets. This amount is roughly equivalent to the book value of the related assets. Additionally, Intel will deposit $300 million with Micron under a new supply agreement.

The IMFT joint venture's term is extended to December 31, 2024, and its scope is broadened to include certain emerging memory technologies in addition to NAND flash. Both Micron and Intel will contribute additional capital to IMFT. The agreement also outlines future buy-sell rights for their respective interests in IMFT starting in 2015.

Existing supply agreements related to IMFS will be terminated. New supply agreements will be put in place where Micron and a subsidiary will supply NAND flash memory and certain emerging technology memory products to Intel. Pricing for these products will be determined on a cost-plus basis. Intel's $300 million deposit will be used towards these product supplies.