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Micron close to Inotera share purchase, says Gartner

06 October 2008 | By Mark Osborne | News > Fab Management

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Inotera Memory Fab 1. 300mm Continued speculation over Micron's influence on further consolidation in the DRAM memory market took another twist recently. Gartner’s market analysts believe that the U.S.-based memory manufacturer is close to purchasing Qimonda's 35.6 percent share in Inotera Memory, the DRAM joint venture with Nanya Technology. Nanya holds a 35.6 percent share in Inotera, while the rest is floated on the Taiwan stock exchange. Micron recently formed a DRAM joint venture with Nanya, dubbed MeiYa.

Gartner noted in its latest newsletter to clients that, should the deal go through, this would result in the MeiYa 300mm fab being put on hold, while the partners focused on Inotera as it already has two 300mm fabs that would require far less investment to convert to Micron’s DRAM design and process technology. The MeiYa fab is an old Nanya 200mm fab.

If such an event takes place, concern would subsequently turn to Qimonda, as Inotera accounts for close to 40 percent of Qimonda’s DRAM production. However, Gartner’s analysts believe that a progressive ramp-down of production for Qimonda would take place, limiting a sudden drop in revenue.

Indeed, the sale of Inotera shares could provide Qimonda with much-needed cash and allow the company to push harder its 65nm buried wordline process technology migration.

Interestingly, iSuppli Corp. noted in a recent press release that Qimonda is on more solid financial ground than many of its competitors.

“Qimonda actually has a relatively good cash balance and a low debt ratio for potential leverage in the future compared to many other DRAM suppliers,” noted Nam Hyung Kim, Director and Chief Analyst for iSuppli.

The other conundrum in Micron’s potential move for Inotera shares, according to the market research firm, is what would Infineon do with its 77 percent share of Qimonda over the next six months?

During Micron’s latest quarterly conference call, Chairman and CEO Steve Appleton did not want to speak in detail or at length about the possible consolidations in the DRAM market, though had on many prior occasions been very vocal on Micron wanting to play its part in such moves to improve the market conditions and achieve a greater level of sustainability in the DRAM market after several years of increasingly severe over-capacity and plummeting prices.

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Tool Order: Inotera purchases equipment from TEL, Lam and Novellus - 04 March 2011

Qimonda closes Inotera share deal with Micron - 26 November 2008

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