Micron Technology Inc. and Intel Corp. have announced plans to create a joint venture to manufacture NAND flash memory for use in consumer electronics, removable storage and handheld communications devices, and in particular to manufacture for Apple Computer Inc.
The move is intended to bolster U.S. interests in the non-volatile memory market which is rapidly displacing DRAM in commercial significance and had been led by South Korean manufacturers.
The joint-venture company, to be called IM Flash Technologies LLC, is set to manufacture chips exclusively for Micron (Boise, Idaho) and Intel (Santa Clara, California). The deal is subject to customary closing conditions and is expected to be finalized around the end of the year, the companies said. In addition and subject to the closing of the venture, Intel and Micron have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of IM Flash Technologies' NAND flash memory output. As part of these agreements, Apple would prepay $250 million each to Intel and Micron.
Intel and Micron have agreed to contribute approximately $1.2 billion each in cash, notes and assets with IM Flash owned 51 percent by Micron and 49 percent owned by Intel.
Micron and Intel would then each contribute an additional $1.4 billion over the next three years and any additional investments as appropriate to support the growth of the operation. Manufacturing is set to take place at wafer fabs owned by Micron located in Boise, Idaho, Manassas, Va. and Lehi, Utah.
IM Flash combines Micron's expertise in developing NAND technology with Intel's multi-level cell technology and history of innovation in the flash memory business, the parents said.
“The creation of this new company supports Intel's intent to maintain its industry-leading position in non-volatile memory and enables us to rapidly enter a fast-growing portion of the flash market segment,” said Paul Otellini, Intel president and chief executive officer, in a statement. “We are looking forward to working with Micron, and are extremely pleased to have Apple broaden its relationship with us.”
IM Flash would move “aggressively” to manufacturing on 72-nm and then 50-nm process technology. Initial production from the company is expected in early 2006.
The management team for IM Flash is set to be led by Intel's Dave Baglee, who previously served as manager of Intel's Fab 11 in New Mexico, and Micron's Rod Morgan, who most recently served as manager of Micron's fabrication facility in Manassas.