Amid dropping profits and layoffs announced late last week, Micron announced Sunday that it would be buying a $400 million stake in DRAM maker Inotera Memories. Inotera began as a joint venture with Qimonda and Nanya Technology.
The $400 million price tag buys Micron the Qimonda share of the joint venture. CNET News reports that the purchase by Micron will be made in two stages. The first stage has Micron putting up $200 million in cash within the next week which will get Micron 18% of Qimonda's stake in Inotera.
Upon final regulatory approval from the Taiwan Federal Trade Commission, the remaining 18% of Qimonda's stake will be purchased for another $200 million as a part of the second stage. Both stages of the buyout must meet governmental approvals and other conditions.
With Micron announcing last week that it was cutting 15% of its workforce and closing one of its NAND fabrication facilities, it seems an odd time to be buying a stake in an DRAM making firm. The closure of Micron's Boise fab reduced its NAND production by 35,000 wafers per month.
Micron Chairman and CEO Steve Appleton said in a statement, "Micron will gain greater scale in DRAM, reduce our operating expenses per wafer and have access to a very cost competitive operation."
Inotera operates a pair of 300mm wafer fab facilities that produce a combined total of 120,000 wafers per month. To fund the purchase, Micron took a term loan worth $285 million at what it calls favorable terms.