Micron And Intel Create New Company To Manufacture NAND Flash Memory
Micron and Intel announced they have agreed to form a new company, IM Flash Technologies, LLC, to manufacture NAND flash memory for use in consumer electronics, removable storage and handheld communications devices. The new company will exclusively manufacture product for Micron and Intel. Formation of the company is subject to customary closing conditions and is expected to be finalized around the end of the year.
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 Technologiesí 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 initially contribute approximately $1.2 billion each in cash, notes and assets to IM Flash Technologies. Subject to certain conditions, the parties will each contribute an additional approximately $1.4 billion over the next three years and intend to make additional investments as appropriate to support the growth of the operation. The company will be 51 percent owned by Micron and 49 percent owned by Intel. Production will initially take place in manufacturing facilities located in Boise, Idaho, Manassas, Va. and Lehi, Utah. Initial production from the company is expected in early 2006.
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