Intel Invests In Micron’s Future

Intel Wednesday said it has written a check for $450 million to Boise, Idaho-based Micron Technologies to advance their joint efforts in wafer production and memory technologies.

The Santa Clara, Calif.-based chip making giant’s Capital investment arm said Micron will use the proceeds primarily to support its investments in 300 mm manufacturing technology and increase its DDR2 memory production.

“We look forward to working closely with Intel in their support of our efforts to provide advanced memory solutions to our customers” Micron chairman, president and CEO Steve Appleton said in a statement. “Micron is committed to the support, development and production of DDR2 on leading-edge technology and Intel’s investment will further enable these efforts.”

The two companies need of each other’s support. For example, last year’s introduction of Intel’s Springdale chipsets (865P/865PE/865G), along with its Canterwood version (875P) are supported by Micron’s PC3200 128MB and 256MB DDR400 DIMM modules. The companies also announced plans to collaborate on the design for future generations of memory technologies.

“The availability of high-performance memory is critical as we continue to develop advanced microprocessors and communications components,” Intel CEO Craig Barrett said. “Intel is making this investment in Micron to help enable such high-end memory capabilities as DDR2 to meet the requirements of our future-generation products.”

But DRAM prices have not been the safe haven the once were and are currently trending upwards in price. Recent market surveys show overall rolling order forecasts for October from major OEMs show a 15 to 20 percent increase month over month as inventory build starts for Christmas.

Appleton said memory content has flattened out in the past month, but attributed it to low end our customers “taking a breather” until the pricing stabilizes.

That may be some time. Micron Wednesday also filed its fourth quarter and year-end results. The company reported a net loss of $123 million, its 11th straight quarterly loss on sales of $889 million and a net loss for the 2003 fiscal year of $1,273 million, or $2.11 per diluted share, on sales of $3,091 million.

To overcome its losses, Micron has been slowly restructuring its business units to reflect changes in the memory marketplace including its battles overseas with its South Korean rivals. Recently, the world’s second-largest computer memory chipmaker recently decided to phase out production of synchronous SRAM products at its worldwide operations. Due to its high cost, SRAM is often used only as a memory cache. In April, the company sold off some of its inventory to Cypress Semiconductor .

Last year Micron reorganized to keep focused on migrating its products from .13 to .11 micron manufacturing process technology.

Intel’s investment buys it rights to common stock representing approximately 5.3 percent of Micron’s outstanding common stock.

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